Credit card spending rises continue

£10.5 billion was spent on credit card purchases in June 2019 according to the latest figures from UK Finance. Credit card spending was 1.1 per cent higher than the same month in 2018  whilst the outstanding level of credit card borrowing grew by 4.0 per cent in the 12 months to June. Repayments have remained in line with credit card spending, showing that consumers are managing their finances effectively overall.Personal borrowing through loans in June 2019 was 2.4 per cent lower than the same month a year ago though lending through overdrafts in June 2019 was 1.3 per cent higher compared to the same month last year.

High street banks agreed more than £50bn of mortgages to homebuyers in the first half of the year, up 10% on the first six months of 2018 and setting up lenders for their biggest year since 2007.

The loans were offered to almost a quarter of a million homebuyers in the first six months, up 6% on the first half of 2018. The number of mortgages approved for house purchase rose to 42,653 in June, on a seasonally-adjusted basis, up from 42,407 in May and close to April’s two-year high of 42,792. UK Finance said gross mortgage lending in June was 4% lower than the same month last year, at £21.9bn, as a result of a dip in remortgaging. The figures also showed that unsecured consumer credit growth was stable at 4.1%, still well below late 2016 levels of 7.1%. Lenders have become more cautious with customers as a result of actions by the central bank that have encouraged them to tighten lending standards.

Richard Pike, Phoebus Software Sales and Marketing Director, said “With both UK Finance and HMRC reporting a fall in lending and property transactions, it appears that earlier more positive sentiment, the great British ‘Keep calm and carry on’ spirit may have wained as our political situation both here and in Europe once again caused uncertainty.  Now that one part of that situation is settled and Boris Johnson takes over as Prime Minister, the question will be whether our future and the prospect of a no-deal Brexit will continue to weigh heavy on consumer confidence.”

“House purchase, being the largest financial commitment most people will ever make, is the one area that has been the healthiest in the last couple of months.  However, that too may start to suffer as we head towards the Brexit deadline in October.”