Consequences of 2007 debts will be seen as rates rise

Mortgage demand was weak in 2007 although approval levels were close to record highs. Meanwhile, demand was strong last March as many home owners wanted to remortgage, most without success.

Nearly 30% of consumers who borrowed on credit cards last December are now running into debt. In fact, last year the level of outstanding credit card debt jumped by £2.5bn to £55bn while outstanding personal loans declined by £9bn.

The true consequences of unplanned mortgage borrowing in 2007 will be seen in the next couple of years as interest rates are forced up.