The taxman says three and a half million people are due a refund, but two million will have to fork out for underpaid tax.
Mortgage debt down by £8.8 billion
Several surveys have forecast house sales to remain sluggish this year
Britons have reduced their mortgage debt by £8.8 billion in the first quarter of this year as the housing market remained subdued, Bank of England figures show.
The figures indicate that households are putting more money into the housing market, through deposits or mortgage repayments for example, than they are taking out, with a cumulative £122 billion injected since the summer of 2008.
However, the Bank said there was "little sign" that households are trying to pay down debt more quickly than in the past, and a lack of activity in the housing market and a reduction in remortgaging are underlying the figures.
Several surveys have forecast house sales to remain sluggish this year, with continued uncertainty over the economy and the eurozone and lenders predicted to tighten their borrowing criteria further and raise their rates.
There has been a general trend towards injections of housing equity since the start of the financial crisis, with a reduction of nearly £8.6 billion in mortgage debt in the final quarter of last year.
The latest figure shows that households spent the equivalent of 3.3% of their post-tax income on reducing their mortgages. However, the figure remains below a record net injection of £10.1 billion seen during the spring last year.
The weak and patchy housing market has left many people with insufficient equity in their homes to withdraw money, while home owners could also find it harder to increase the size of their mortgage due to the tighter criteria being applied by lenders.
Analysts said the trend towards an injection of cash rather than a withdrawal seen for 16 quarters in a row could have a restricting effect on consumer spending, affecting the wider economy.
Howard Archer, chief UK and European economist at IHS Global Insight, said that despite the Bank playing down people's desire to pay down their debt more quickly as a factor, poor returns on savings have "undeniably" made it more attractive for people to use any spare funds to reduce their mortgages.
Vicky Redwood, chief UK economist at Capital Economics, said: "The low level of transactions has also reduced the opportunity for households actively to withdraw equity when they buy a house or remortgage. And for many households, this will therefore have reduced the funds they have available to spend."
related stories on msn
latest money videos
Oil giants BP and Shell were today warned by Downing Street that they must co-operate fully with a European Commission investigation into price-rigging claims.
Date 15/05/13, Duration 2:29, Views 766
more on msn money
msn money poll
What current account benefit would you like more of/value the most?
Thanks for being one of the first people to vote. Results will be available soon. Check for results
- Medical/life insurance
- Travel insurance
- Breakdown cover
- Legal aid
- Tickets for cultural or sporting events
- Lower charges