Tighter household finances led to a slowdown in consumer and mortgage borrowing over the last month, a new report claims.
Statistics from the Major British Banking Groups shows that net mortgage borrowing rose by an underlying £5 billion in April - slightly lower than the level recorded in the previous month. Unsecured personal borrowing remained unchanged, compared with a fall of £0.1 billion in March - while underlying credit card borrowing fell by £0.1 billion and loans and overdrafts increased by £0.1 billion.
"Lower mortgage demand, weaker deposit growth and little change in personal loans or credit card borrowing all point to people paying more attention to their finances," said David Dooks, British Bankers Association director of statistics.
"High house prices and increasing monthly repayment costs are causing a slow down in the mortgage market and people are using money from their accounts instead of borrowing to meet their spending needs," he continued.
David Stubbs, a senior economist from the Royal Institution of Chartered Surveyors, said that a recent interest rate rise was beginning to have an effect.
"Mortgage lending is slowing as rising house prices and interest rates continue to worsen buyer affordability. The recent interest rate rises has clearly started to affect consumer confidence and with a further rise expected in the summer, lending will continue to decrease," he commented.
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