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UK banks say consumers paying card debt

U.K. banks on Wednesday reported increased lending to home buyers in November but consumers put less into savings accounts and continued to reduce their credit card and unsecured debt.
/ Source: The Associated Press

U.K. banks on Wednesday reported increased lending to home buyers in November but consumers put less into savings accounts and continued to reduce their credit card and unsecured debt.

Loans for house purchases rose to 6.6 billion pounds ($10.5 billion) in November, up from 6.1 billion pounds in October and more than double the amount approved one year ago as the credit crunch hit hard, the British Bankers Association said.

Remortgaging and equity withdrawal lending remained at low levels, however, and total mortgage lending was down 12 percent compared to a year earlier, the BBA said.

Consumers repaid 5.9 billion pounds of credit card charges, or 100 million pounds more than they borrowed. Net lending for personal loans and overdrafts declined by 500 million pounds, the BBA said.

Savings deposits rose by 1.4 billion pounds, down from 3 billion pounds in October.

"Household priorities are showing up in the November figures," said David Dooks, the BBA's director of statistics.

"Demand for new personal loans was weak and people are paying off debt or building savings in response to economic circumstances."