Mortgages rise as unsecured loans fall

FRIDAY, MAY 05, 2006

Britons at last appear to be sorting out their debt problems, as new figures reveal that the amount of personal borrowing, in the form of unsecured loans and overdrafts, declined in March.

This represents the first time in over ten years that net lending on loans and overdrafts has fallen, with a £0.1 billion drop in March in comparison to a £0.6 billion increase the previous month.

Figures from the British Banker's Association (BBA) also found that mortgage lending rose in March to £17.7 billion, the highest total for the month on record, as the property market continues to show strength.

"Whilst partly reflecting the high number of working days in the month, the approvals numbers show that mortgage activity is running at a higher level than at this time last year, although the market is still somewhat short of the heady times of 2004," commented David Dooks, BBA director of statistics.

Net lending on credit cards dropped by £0.2 billion in March, while the fall in unsecured loans suggests that Britons are turning their backs away from increasing their debts at high levels of interest.