Consumer lending from such sources as credit cards and other personal unsecured credit is being repaid at record rates, according to new information from the British Bankers’ Association.
Out of the £7.3 billion repaid by consumers to credit card firms, only £7 billion of that figure was from that January borrowing, the BBC said. The results were that around £305 million in net consumer credit repayments were made towards long-term debt, rates that have been unmatched since January of last year.
Other sources of debt, such as mortgage lending or overdraft facility borrowing, have also demonstrated higher repayment ratios as well, possibly due to consumers growing more thoughtful regarding their spending habits due to household incomes continuing to be squeezed by the tough economic conditions. The results of these more careful spending habits has been net debt repayment occurring six times over the last seven months.
Mortgage approvals declined in February to 33,103, down from its two year high in January of 38,000. The BBA attributed the drop to a decline of the number of first time home buyers attempting to purchase residential properties in the run up to the cessation of the £250,000 or less stamp duty holiday.
David Dooks, statistics director for the BBA, said that households and businesses alike are continuing to express caution in regards to their financial situation in the currently rocky economic landscape. The main way these sentiments are expressed, Mr Dooks said, is reluctance on the part of consumers to undertake new borrowing or attempting to repay bank borrowing wherever possible.