Growth in the amount borrowed by consumers in the form of credit cards and loans fell in November to its lowest since December 2015, as the amount borrowed by home buyers also declined.
Figures by the Bank of England showed growth in consumer credit slowed to 9.1 per cent in the year to November, from 9.5 per cent in October, and its lowest since the 8.7 per cent seen in December 2015. However, the total amount borrowed rose to £205.8bn, from £205.1bn the month before.
Although growth in credit card borrowing ticked up slightly, from 8.6 per cent in October to 8.8 per cent in November, growth in personal loans fell, from 10 per cent in October to 9.3 per cent in November.
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Meanwhile, home buyers took out 65,139 mortgages, down from 67,925 during the same month in 2016. The total value of mortgage borrowing edged higher, from £20.5bn in November 2016 to £22.1bn in 2017, although the value of mortgages for house purchase fell year-on-year, from £12.1bn to £11.9bn.
The figures coincided with the publication of data from Nationwide, which showed house price growth in the UK slowed to a modest 2.6 per cent in 2017, down from 4.5 per cent the year before.
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“The annual decline in mortgage approvals highlights a lower level of activity in the property market,” said Josie Dent, economist at the Centre for Economics and Business Research (Cebr)
“While a slowdown in the housing market will be welcomed by many first time buyers looking to make it onto the property ladder, the ability to save for a deposit is still the biggest challenge.
“Also more generally, falling house prices are not good news for UK macroeconomic stability. If house price growth slows to the point of a depreciation, it will pose a threat to household balance sheets, which can weaken households’ ability to borrow. Furthermore, if households cannot borrow then there will be a knock-on reduction in spending.”
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