Mortgage and unsecured lending declines by £11bn in a year

by Gill Montia

Story link: Mortgage and unsecured lending declines by £11bn in a year

Price comparison website, uSwitch.com, has calculated that lending in the mortgage and unsecured loan market has fallen by £11 billion in the year from the end of June 2007.

Gross mortgage lending declined by an average of £2.5 billion a quarter over the period, accounting for £10 billion of the fall.

Making a further comparison, uSwitch asserts that mortgage lending fell by almost £20 billion in the 12 months to the end of June 2008, compared with the same period of 2006/07.

Meanwhile, unsecured has been falling by an average of £283 million a quarter in the year to end June 2008.

However gross credit card lending has increased during the period, rising by an average of £179 million a quarter and totalling £717 million over the year to the end June 2008.

uSwitch personal finance analyst, Simeon Linstead, says the research shows the extent to which consumers are turning to credit cards to support their spending.

According to the website, there are 67.3 million credit cards in circulation; the average credit card balance stands at £1,384 and the average limit at £5,129.

The firm calculates that consumers can spend a further £103 billion before credit limits are reached, although it is unlikely that maxed-out consumers could service such a level of credit card debt.