Consumers stay cautious over borrowing

Consumer borrowing continued to fall in September as people remained cautious about taking on more debt, figures showed.
By The Newsroom
Published 3rd Dec 2010, 18:34 BST
Updated 3rd Dec 2010, 18:34 BST

Total lending by members of the Finance & Leasing Association fell to 4.58bn during the month, 6 per cent less than September 2009.

All areas of lending were lower than a year ago, apart from car finance which rose by 2 per cent to 1.49bn.

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Borrowing for high street spending saw the biggest dive, with store instalment credit dropping by 23 per cent to 155m, while lending through store cards was 22 per cent lower at 160m.

There was also an 8 per cent slide in the amount of money people borrowed on credit cards during the month, although at 2.25bn this remained the largest area of lending.

FLA members advanced just 24m through second mortgages, under which people borrow money secured against their property, 11 per cent down on a year earlier, while borrowing through unsecured loans fell by 5 per cent to 205m.

Fiona Hoyle, FLA head of consumer finance, said: "The new figures show that consumers continue to take a cautious approach to spending, with a decline in the amount of credit granted almost across the board."