Gross mortgage lending in February was estimated to have been £19bn, 4.9% more than the previous year but below the monthly average of £21.4bn seen throughout 2017, according to the figures published in the Lending Update by UK Finance.

However, despite the amount borrowed dropping in February, the number of remortgage approvals increased by 9% in both volume and value, compared to February 2017.

Consumer spending was largely reflected in the use of credit cards, with the level of spending rising by 6.3% over the year, whilst loans and overdrafts continue to fall in popularity.

Commenting on the personal finance data, UK Finance personal finance managing director Eric Leenders said: “There has been an increase in remortgage approvals compared to last year, as borrowers look to lock in to attractive deals amid speculation of further interest rate rises later this year.

“We are also seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing such as overdrafts continue to fall.

“Meanwhile real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales. This pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.”

Within the commercial finance sector, over the past 12 months UK business deposits grew by 7% and borrowing experienced a small level of growth at 0.5%. However, while manufacturers’ borrowing increased, borrowing within the construction and property-related sectors saw lower levels of activity over February 2017.

"Bank lending to businesses saw modest year-on-year growth in February, driven by investment within the manufacturing sector,” UK Finance commercial finance managing director Stephen Pegge said.

“"Credit balances have risen at an even faster rate as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence."

To view the full report, click here.

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