Mortgage Finance Supply Low As Consumers Steer Away From Borrowing

A Bank of England report has revealed consumer demand for borrowing remains fragile, with the number of new mortgages in September remaining almost unchanged on the previous month at 47,474. This equilibrium suggests consumers are cautious about the short-term economic outlook, although the figures did reveal a small rise in personal loan and credit card borrowing, indicating that consumers may be starting their Christmas shopping early.

A Bank of England report has revealed consumer demand for borrowing remains fragile, with the number of new mortgages in September remaining almost unchanged on the previous month at 47,474. This equilibrium suggests consumers are cautious about the short-term economic outlook, although the figures did reveal a small rise in personal loan and credit card borrowing, indicating that consumers may be starting their Christmas shopping early.

The figures have highlighted the stark contrast in mortgage borrowing from the height of the property bubble in September 2007, when £10bn of new mortgage debt was taken on and now, which is some 99% lower at only £112m. Adrian Coles, director-general of the Building Societies Association, said “The economic outlook remains challenging for households” … “The labour market remains weak, causing earnings to grow at a rate below current price inflation. It is therefore particularly hard in the current low interest rate environment to attract households to save.”

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