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UK Finance Issues Update on Lending for February 2018
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
UK Finance has issued its monthly update on lending for February 2018.
The report shows that gross mortgage lending in February is estimated to have been £19 billion – 4.9% more than in the same month last year, but below the monthly average of £21.4 billion for 2017.
Remortgage approvals in February were up by over 9% in both number and value compared to February 2017.
The figures also reveal that consumer spending was mainly reflected in the use of credit cards, with outstanding levels of card borrowing growing at a rate of 6.3% over the year, while use of loans and overdrafts continues to drop.
UK businesses’ deposits rose by almost 7% in the 12 months to February, while borrowing over the same period grew slightly, by 0.5%. Within business sectors, manufacturers’ borrowing expanded, while construction and property-related sectors contracted.
Eric Leenders, the Managing Director of Personal Finance at UK Finance, comments on the data: “There has been an increase in remortgage approvals compared to last year, as borrowers look to lock into attractive deals amid speculation of further interest rate rises later this year.
“We are also seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing, such as overdrafts, continue to fall.”
He continues: “Meanwhile, real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales. This pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.”
Stephen Pegge, the Managing Director of Commercial Finance at UK Finance, adds: “Bank lending to businesses saw modest year-on-year growth in February, driven by investment within the manufacturing sector.
“Credit balances have risen at an even faster rate, as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence.”
