28 July 2006
The UK has collectively shifted much of its debt burden from unsecured personal loans and credit cards to mortgages, British Banking Association (BBA) figures have shown.
The overall amount owed on personal loans and overdrafts rose by £0.2 billion during June, half the average monthly rise of the previous six months.
It was also significantly down on the £0.7 billion increase seen in May. Overall credit card lending was down by £0.2 billion, consistent with average monthly falls.
In comparison, the June figure for overall mortgage lending stood at £20.5 billion – the highest figure on record, 12% up on May and 24% up on the market in June 2005.
Nonetheless, leaving aside the unusual lows seen in 2005, the number of new mortgage approvals remained lower than historical figures, said David Dooks of the BBA.
"Although gross mortgage lending reached record levels in June, numbers of approvals though stronger than in mid-2005 were weaker than at the equivalent time in either 2003 or 2004," he said.
"The relatively strong retail sales reported for June do not seem to have been reflected in consumer credit lending which has continued to show the weakness, particularly in credit card borrowing, which has been apparent for most of this year."
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