Lending rises by record £6.1bn in October

Mortgage lending rose by an underlying record of £6.1bn in October, figures from the British Bankers Association reveal.

In contrast, unsecured personal lending rose by just £0.6bn, compared with the recent average of £0.8bn, while card borrowing accounted for around half of this rise.

The figures also show that total net lending to the UK private sector increased by £6.2bn to £949bn. This was down from the previous month&#39s rise of £8.1bn.

Lending to companies was flat in October. Increased lending to real estate, construction, wholesalers, hotels and catering and water companies was offset by net repayments from financial companies and retailers.

David Dooks, director of statistics at the BBA, says: “The major banks&#39 mortgage lending reached a new peak in October. This may have resulted from customers wanting to fix their borrowing costs in advance of a possible rise, though mortgage borrowing is often used as an alternative to unsecured borrowing, so higher mortgages and lower demand for personal loans and borrowing on credit cards may simply reflect that customer choice.

“Growth in the banks&#39 lending to companies still gravitates towards property-related sectors, whilst demand from retailers and manufacturers&#39 for finance remains subdued.”