Credit card lending fell for the first time in March
UK consumers’ credit card debt fell for the first time since records began in March, as lockdown measures froze spending.
The annual growth rate of credit card lending fell to minus 0.3 per cent, the first negative annual growth since the Bank of England (BoE) started tracking the data. The annual growth rate of other loans and advances fell to 5.6 per cent.
British households repaid £3.8bn of consumer credit in March – the largest on record. Within this, credit cards accounted for £2.4bn of net repayments.
Weak net lending reflected a steeper decline in new borrowing that was partially offset by marginally lower repayments. Gross lending was £5.4bn weaker than February, while repayments were £1.3bn lower.
Mortgage approvals drop to seven-year low
Evidence of a decline in housing market activity began to show in March. Mortgage approvals fell by over 20 per cent to 56,200, their lowest levels since March 2013.
Mortgage borrowing picked up slightly in March, with a net increase of £4.8bn. The annual growth rate rose slightly, to 3.6 per cent. However, mortgage borrowing tends to lag approvals so this strength is likely to indicate strength in approvals in previous months.
Former Rics residential chairman, Jeremy Leaf, said: “The only good news is that it seems most deals have not been cancelled or withdrawn unless the buyer is employed in an industry particularly badly affected by the pandemic.”
“Most seem to be prepared to proceed hopefully sooner rather than later when restrictions are eased and surveyors can start to revisit properties again.”
The value of British homes grew at their fastest rate since February 2017 before the coronavirus lockdown brought the market crashing to a halt, Nationwide data released today showed.