Consumers ‘increasingly cautious’ over loans

Both borrowers and consumers have become more “cautious” as a result of the credit crunch and the resulting economic downturn, an expert has suggested.

Speaking as he attended the BSA’s annual conference, director-general of the Building Societies Association Adrian Coles explained that attitudes towards loans had changed.

Quoting one of the speakers at the event, he suggested that borrowers and lenders had a “hangover”, which has resulted in them saying the equivalent of “never again I don’t want another drink”.

Recent figures from the Bank of England showed that the annual growth rate of consumer credit fell still further in March this year to 3.2 per cent, with major lenders reporting weak net lending figures for April.

Further statistics from Credit Action predicted that the number of people being declared insolvent or bankrupt each day could rise to 435 this year, a rate of one every 3.3 minutes.

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