Unsecured debt falls as mortgage debt rises

Credit card debt and unsecured lending both fell in August 2007 while mortgage lending rose, according to the latest figures from the British Bankers’ Association (BBA).

The BBA said that net mortgage lending rose by an underlying £6.1 billion during August, a rise on the £5.8 billion from July and the £5.4 billion average monthly figure.

Meanwhile, credit card borrowing fell by £100 million and loans and overdrafts fell by £300 million, suggesting that debt advice has been taken onboard and that people are attempting to clear debt.

“Banks’ mortgage lending – standing at £550 billion – rose by more than the recent trend, in part reflecting higher remortgaging activity,” said David Dooks, BBA director of statistics.

“Unsecured borrowing fell and there was a further reduction in credit card debt, while customers’ deposits of £520 billion continued to grow in line with the recent pattern.”

According to the BBA, personal deposits grew by £4.4 billion, suggesting that the nation is saving more.

Research last month from Unbiased.co.uk revealed that more than 2.5 million Britons have no idea what their total figure of debt is.