Mon, 29 Aug, 2016
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BBA: Credit card debt down, mortgage lending up

Total credit card debt has dropped and more new mortgages are being taken out, according to the British Bankers' Association (BBA).

The BBA's figures show the UK ended June with 245 million less outstanding on their cards, whereas gross mortgage lending has hit a record high of 20.5 billion.

Unsecured borrowing was also down, with personal loan and overdraft demand weaker than in May.

"Consumers are keen to find less expensive ways of financing their spending," said Howard Archer, chief UK economist at the Global Insight consultancy.

"Record high debt levels, rising unemployment and increasing pension concerns means that there is an increased need for many consumers to try and improve their finances."

June was the third time in four months where credit card debt had dropped, perhaps indicating that people are beginning to address their financial issues.

Record mortgage lending figures were 12 per cent higher than at the end of May and 24 per cent higher year-on-year.

Figures from the Council of Mortgage Lenders released earlier this month show that the non-conforming mortgage is growing around six times faster than the mainstream mortgage market.

This type of loan does not have set guidelines, can vary widely from lender to lender and provides customers with a more flexible option.