Credit cards and loan borrowing slows

The Bank of England has published its latest Money & Credit report which shows that the annual growth of consumer’s borrowing on credit cards and as other loans continued to slow, though at a more gradual pace than the second half of 2018.

Whilst annual growth of bank lending to businesses fell in February for large business and SMEs, reversing increases in January.

Commenting on figures Craig McKinlay, New Business Director at Kensington Mortgages, said “The data shows that more and more people are being increasingly cautious as economic and political uncertainty plays its part, with net borrowing, mortgage approvals and remortgage approvals all below the average of the previous six months. Despite weaker consumer confidence, the mortgage market remains very competitive, particularly for first time buyers with smaller deposits, with a huge number of products to choose from. This data combined with slowing house prices could be seen as a buying opportunity but low levels of supply remain a problem.”

Mark Gordon, Director of Mortgages, comparethemarket.com . said The Bank of England figures highlight that mortgage borrowing has weakened, showing that Brexit uncertainty is having an impact. However, the mortgage market remains competitive, with a wide selection of deals available on the market and mortgage rates at historic lows. Deals for first time buyers are particularly compelling, with an increase of 95 per cent mortgages on offer.”

“We also know that there are still a staggering 800,000 homeowners in the UK languishing on standard variable rate mortgages and many of these households could be getting a better deal. An SVR is typically around 4.5%, and can be as high as 6%. By comparison, the lowest 2 year fixed rate deal available is over 3 percentage points cheaper. A 3 percentage point lower rate on every £100,000 could mean a saving of £3,000 each year for a household.”