Lending down by billions in past year

27 August 2008

Figures released by comparison site uSwitch show the amount of money lent to British consumers in the form of mortgages and unsecured personal loans has dropped by nearly £11 billion in the past 12 months.

Unsecured personal loans have decreased by an average of £283 million (39,338 loans) during each quarter of the past year. This decline totals £1.1 billion (over 157,000 loans) when one compares the second quarter of 2007 with the corresponding period in 2008.

Furthermore, mortgage lending declined by nearly £20 billion, when the period of July 2006 to June 2007 is compared with July 2007 to June this year. Head of personal finance expert at the site, Simeon Linstead, said borrowers have found unsecured loans and mortgages to be more expensive.

"However, the market is vast and there are still competitive rates for those who take the time to compare the offers available," he added.

The research also found an increase in credit card use, most likely to make up for the difficulty in finding unsecured loans.

This may suggest more people are finding themselves in credit card debt. This week Sainsbury`s Bank said credit card companies should make reward schemes easier to understand.

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