Looking at trends in lending can help you identify the best type of borrowing, no matter how many recessions or credit crunches we go through. Though both business and consumer borrowing were on the increase generally throughout 2016, after the EU referendum and US election results, the markets and rates remain uncertain from month to month. But it wasn’t all bad news to begin with.
An increase in bank funding
In the first half of 2016, before the June referendum, there was an overall increase in bank funding. In fact, mortgage approvals rose by nearly 10%. Though much of this was due to Buy To Let mortgage applications being placed before an impending change in Stamp Duty, owner-occupier mortgages were also on the up.
General consumer credit also rose by nearly 10%. It seems that people were still keen to borrow and lenders were more than happy to oblige. Increased supply and demand from both parties saw unsecured lending increase significantly with people taking advantage of a loosening in credit checking criteria.
So, not much to complain about overall. According to the Bank of England’s credit conditions through this period of 2016, we saw trends in lending increase almost across the board. Only lenders of secured credit decided to pull back a bit. Then June 24th happened.
If it ain’t broke, don’t brexit
When the British people voted for the UK to leave the EU, it sparked a knee jerk reaction in financial markets across the world that saw the British Pound drop to its lowest value for 30 years. In the weeks that followed, the market slowly began to pick up and eventually got back to some kind of normality.
Unsurprisingly though, it didn’t do much for the lending market. In the third quarter of 2016 from July to September, only the supply of secured credit to households remained unchanged. However, cages were definitely rattled and credit scoring criteria got tighter.
This period also had an increase in credit card lending as well, while lenders saw the number of household loan applications being approved decline. The demand for secured lending for house buyers fell like a stone as well due to the uncertainty surrounding the Brexit panic.
Banks and lenders can only speculate what might happen in the 2017 markets. Predictions do include the increase of consumer credit overall, with non-credit card unsecured lending also likely to be on the rise, but it’s certainly unsettled times.
With no one really knowing what’s in store financially, the one thing everyone can agree on is that 2016 was a uniquely unpredictable year. But, similar trends in lending have always been part and parcel of the boom and bust cycle that we live through. What we do know is that lenders are still willing to lend and money is certainly available.
At Car Cash Point we welcome any applications for a loan secured against your car. With no formal credit checks to hold you back, it could be a fast, easy and safe way to get some much needed funds for 2017. Call 0333 220 4419 or apply online today to see how we can help you.