Phil MeekinView Profile
It has been reported the number of people in the UK taking out mortgages to buy a home rose again in November. The appetite for other loans and overdrafts continued to fall however.
The Bank of England figures show that mortgage approvals in November 09 stood at the highest level since March 2008. There were 60,518 mortgages approved for house purchases in November, up from 57,718 the previous month.
As is usually the case during recession, people show reluctance to take out loans for big purchases, such as cars. This is due to the lack of security over jobs and the relatively high cost of borrowing. Although credit card lending rose slightly in November, the lack of popularity of other loans and overdrafts meant that people paid back £376m more than they borrowed during the month. This cautious approach has resulted in consumers continuing to pay back unsecured loans, with consumer credit falling for the fifth month in a row. The repayment of debts has been seen regularly in the Bank of England figures, reaching £591m in October.
The economic climate has also affected the amount people are saving. This is partly attributed to people preferring to use their money to repay or reduce debts, finance spending or invest elsewhere.