Consumer credit increased by £0.9 billion in April, in line with the monthly average increase since July 2018. The annual growth in consumer credit continued slowing, to 5.9% from 6.4% in March – its slowest rate since 2014 – as households limited spending on credit cards and cut back on finance deals.
The figures highlighted as part of the Bank of England’s monthly Money and Credit statistical release on lending.
The report also highlighted that net mortgage lending was £4.3 billion in April, slightly higher than the average of £3.8 billion seen over the previous six months. Mortgage approvals for house purchases hit a three-month high in April, with the number of residential mortgages approved reaching 66,300. Net mortgage borrowing by households was strong for the second month in a row, hitting £4.3bn compared with an average £3.8bn over the previous six months.
Whilst UK businesses raised £5.7 billion of net finance in April, driven by borrowing from banks and bond markets.
Commenting on the figures Richard Pike, Sales and Marketing Director at Phoebus Software said “It appears from the Bank of England figures, that remortgaging, which has had a big part to play in holding up the mortgage market in the last couple of years, has at last levelled out. Of course, for those people that took advantage of the stamp duty relief to move their current deals will have come to an end and we could see another uptick in the remortgaging figures next month. With household debt rising consistently remortgaging to a better, less expensive, deal is one way quick way to reduce household spend and even consolidate some debt.”
“Conversely, the number of approvals for house purchase increased, which is a good sign for the whole market. As lenders offer better and better rates and deals, it is a good time for people to move up, or down, the ladder.”