Consumer Borrowing Restrained During April

Wed, 28 May 2008

The level of consumer borrowing in the UK remained subdued during April, as lenders continued to tighten their criteria for loan applications, new figures have revealed.

The British Banking Association (BBA) said that net lending on credit cards fell by £0.3 billion during the 4-week period, while growth for new loans and overdrafts dropped by 3.6 per cent and the number of approvals for equity release loans fell to 33,720.

In contrast, the BBA recorded an increase in the number of loans approved for house purchases, with some 38,704 home loans receiving the green light – an increase from the 35,546 loans that were granted by lenders in March.

Howard Archer, an analyst at Global Insight, explained: "Despite April's modest rise in mortgage approvals, the BBA data are still very weak and indicate house buying remains under severe pressure from the damaging combination of stretched affordability and tight lending conditions."
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