Britons withdrew a record amount of equity from their homes during the final quarter of the year as their confidence in the housing market remained high, figures showed yesterday.

The Bank of England said people took £16.19bn out of their properties during the three months to the end of December.

This dwarfed the revised figure for the third quarter, which was the previous record, of £13.55bn, and was also well up on the £11.81bn withdrawn during the same quarter of 2002.

The amount of money people released from their homes during the final quarter of the year represented 8.3 per cent of their net income, up from seven per cent during the previous three months and replacing the former peak of 7.7 per cent reached in 1988.

People are increasingly cashing in on the housing boom by withdrawing money from their property to finance large purchases and home improvements or to consolidate debts.

Under equity release schemes, lenders allow homeowners to increase their mortgages in exchange for a cash lump sum if their property is worth more than the original sum they borrowed.

Simon Rubinsohn, chief economist at stockbroker Gerrard, said: "I am quite surprised at the extent of the record. There is no doubt it is a very strong figure."

He said the rise in equity release increased the likelihood that the Bank of England's monetary policy committee would increase interest rates again.