Hull and Barnsley home to 'credit deserts' where many struggle to borrow at affordable rate

Liverpool, Rochdale, Blackburn, Burnley, Blackpool, Barnsley, Hartlepool, Sunderland and Hull were among the areas that cross-party think tank Demos identified, alongside Swansea, Merthyr Tydfil and Caerphilly. In Scotland, Dundee was also mapped as being a credit desert.

Credit deserts may be places where there is a clear need for borrowing, along with high concentrations of high-cost lenders and households with low average credit scores.

Demos said that while many so-called credit deserts do have bank branches, building societies and credit unions, some residents may struggle to access their services due to their credit history. This means they may need to turn to higher cost options to borrow cash.

The report said: "In most credit deserts, the paucity of affordable options is accompanied by a concentration of high-cost credit, as most credit deserts feature a very high number of payday lenders, pawnbrokers and rent-to-own shops."

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Report author and Demos senior researcher Sacha Hilhorst said: "For those with good credit scores and low need, it's easy not to think about credit too much.

"But for millions of people, credit is a regular source of worry. With little savings and very limited access to affordable credit, something as ordinary as a fridge breaking down can send you into a financial tailspin."

Demos said that while low-income areas are more likely to be defined as credit deserts, this was not the only factor - as households in some low-income areas have their finances bolstered by high levels of home ownership.

The report said some middle-income areas can also have extremely low credit scores - which may be due to factors such as high student populations with thin credit files or high levels of employment instability which could make it harder to borrow.

The report said there is no "one-size-fits-all" solution to improving the credit environment. It said local politicians and businesses also have a part to play in improving each area's credit experience.

Here are the 29 local authority areas identified by Demos as being credit deserts:

Torfaen, Lincoln, Barnsley, Dundee City, Rochdale, Swansea, Blackburn with Darwen, Nottingham, Hyndburn, South Tyneside, Burnley, Corby, Doncaster, Sandwell, Stoke-on-Trent, Halton, Sunderland, Caerphilly, Liverpool, Wolverhampton, Hartlepool, Neath Port Talbot, Rhondda Cynon Taf, North East Lincolnshire, Knowsley, Blackpool, Merthyr Tydfil, Blaenau Gwent, and Kingston upon Hull.