Consumers 'paying down mortgage debt'

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Consumers 'paying down mortgage debt'

Thu 27th May 2010

Recent figures suggest people are choosing to pay off their debts in the current economic climate, rather than build up their savings, according to a British Bankers' Association (BBA) representative.

David Dooks, statistics director at the industry body, highlighted how individuals appear to be pursuing this strategy "even in the main Isa season".

In his view, there is a degree of uncertainty present and this is affecting people's decision-making and bringing down consumers' confidence.

Mr Dooks added: "Overall lending to companies remains subdued, although the annual rate of contraction appears to have bottomed out."

The comments follow the news that banks' net mortgage lending dropped to 4.3 per cent in April, which is a modest fall from 4.5 per cent in March.

This week, the BBA welcomed proposals by the Office of Fair Trading to spur on market liberalisation in the industry and said it will provide a detailed response soon.

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