Britons borrow £1bn more in loans

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The amount of money Britons borrowed through loans and cash advances rose by £1.0 billion in January, according to official Bank of England data.

This was higher than the growth of £0.8 billion in December, while credit card lending saw a "very small increase" in January, compared to a £0.2 billion increase in December.

At £9.6 billion, the increase in secured lending was below the rise experienced the month before but in-line with the average for the previous six months.

Growth in the total amount of money owed by Britons fell, the figures revealed, from an increase of £11.3 billion in December to £10.6 billion in January, bringing the 12-month growth rate down to 10.5 per cent.

However, while Britons borrowed less overall, the number of mortgages and remortgages approved during the month grew.

The numbers of loans approved for house purchase (120,000), remortgaging (104,000) and other purposes (81,000) were all higher than in the previous month.

Capital Economics' Vicky Redwood told Sky News that the figures showed that overall the property market was still firm, although there were some signs of dampening.

"We are certainly past the peak but there are still high levels of lending," she commented.

Credit Crunch Hits Homeowners

Research has now found that 6% of people had used their credit cards to pay their rent or mortgage during the last twelve months.

As housing costs are still rising it is becoming a worry that many more will use credit to stay on the property ladder. Young people in particular are likely to use this method for rent or mortgage payments with around 7.5% admitting to already having used their credit cards for this purpose.

Some people have been badly hit by the credit crunch and being blamed for this are interest rate rises, irresponsible lending by banks, building societies and mortgage lenders and unaffordable housing costs.

Many are desperate to keep a roof over their heads they are resorting to using credit to do so. Most credit card companies charge interest rates of at least 50% more than even the highest mortgage rates given to those

Stopping of Dual Regulation

The Treasury has published a consultation document about proposed alterations to the Consumer Credit Act 1974 trying to prevent the dual regulation of mortgages.

Stakeholders are being asked to submit their views to make sure that the Financial Standards Authority and the Office of Fair Trading remain mutually exclusive.

The changes will make the regulatory position clear and lessen burdens associated with dual regulations for both lenders and borrowers. Consultation is to get a balance between minimising the regulation burden on businesses and to protect consumers.

Consultation will close on 14th February 2008.

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