The figures, released today, show that millions of borrowers continue to divert cash away from high street spending to reduce the size of their mortgage debt amid fears of rising unemployment and continued economic uncertainty.
Banks and building societies have also held in place tight restrictions on the proportion of mortgage debt that can be taken out against a property.
It is the seventh quarter in a row that the Bank's Housing Equity Withdrawal figures have been negative, although the amount that was paid back by consumers was the second lowest since the trend began in 2008.
Homeowners reduced the level of debt secured against their homes by £22.3 billion in 2009, or by £36 over the last 21 months.
The level of debt repayments peaked in the final quarter of 2008, when homeowners injected £7.11 billion back into their properties, in the face of the economic downturn and falling house prices.
This is compared to the last three months of 2003, when Britons took advantage of soaring property values to borrow an extra £17 billion against their homes.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The seventh successive, and still marked, net injection of housing equity in the fourth quarter of 2009 is the consequence of the ongoing desire of many people to improve their personal balance sheets given high debt levels and still serious concerns and uncertainties over the economic situation
"Housing equity withdrawal has been used significantly to support consumer spending in recent years. Consequently, current ongoing net injections of housing equity is adding to the constraints on consumer spending including high unemployment and still falling full-time employment, and muted wage growth."
Meanwhile, the cost of taking out a new mortgage continues to fall as lenders compete to attract borrowers who meet tight lending criteria.
Nationwide Building Society, the UK's largest mutual, has cut the interest rates of a number of fixed-rate and base-rate tracker deals for those buying a home or remortgaging by up to 0.59 percentage points.
The largest cut in its rates reduces monthly repayments on a £150,000 interest-only home loan by up to £90 a month.
The mutual has a two-year tracker deal pegged at 2.69 points above base, a pay rate of 3.19 per cent, available up to 70 per cent of a property's value. It has a £495 fee.
The Post Office has said that it is cutting the cost of its fixed-rate mortgages for the fourth time this year by up to 0.16 percentage points. It is offering a two-year fixed-rate deal available up to 80 per cent of a property's value at 3.99 per cent.
Woolwich, the mortgage brand of Barclays, has also cut the price of its most competitive home loans today.
The latest cuts by leading mortgage lenders come as figures show that the average cost of a two-year fixed rate mortgage is currently 4.72 per cent, down from 4.88 per cent in January, while two-year tracker rates have dropped to 3.58 per cent from 3.77 per cent, according to figures from Moneyfacts.co.uk, the financial information website
This article appeared in http://www.timesonline.co.uk/tol/news/ on 6th April 2010.