StepChange responds to new Bank of England borrowing data
29 July 2024
New figures from the Bank of England show individuals borrowed, on net, £2.7 billion of mortgage debt in June, up from £1.3 billion in May. Meanwhile net consumer credit borrowing remained high at £1.2 billion, albeit a slight dip from £1.5 billion in May.
StepChange Debt Charity says despite some positive signs of rising consumer confidence the overall picture for households is mixed, as homeowners continue to struggle with increased costs, and many are yet to secure a fixed-rate deal as interest rates look likely to remain high.
Richard Lane, Chief Client Officer at StepChange, said:
“An increase in borrowing may indicate an uptick in confidence among consumers but we know that the pressure for homeowners is far from over. Our recent research revealed one in four (23%) mortgage holders are using credit to keep up with their mortgage, a figure which may well increase as more households secure a new fixed-rate deal and see their mortgage costs take up a much higher proportion of their income.
“It’s yet to be seen whether interest rates will begin to fall later this week, but regardless of whether they do, mortgage servicing costs are significantly higher than just a few years ago. Meanwhile, despite energy bills being less of a burden in summer, cost of living pressures haven’t gone away, and combined with inflated housing costs, many households remain vulnerable to worsening debt.
“We’ve seen promising commitments from the new government to address financial insecurity among households – but we’re yet to see firmed-up details of what this will involve. A long-term strategy that looks at the affordability of essential bills and financial resilience is necessary to really curb reliance on credit to make ends meet.”
For anyone struggling to keep up with their mortgage or facing unmanageable debt, free and impartial advice is available from charities like StepChange.
Notes to Editors
- The Bank of England’s Money and Credit data for June can be found here.