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Research expert covering construction, loans, leasing, savings, and debt
Consumer lending in the United Kingdom - statistics & facts
Consumer lending levels in the United Kingdom (UK) suffered a shock during the COVID-19 pandemic, a period in which people’s consumption habits were very constrained. Meanwhile, people took on a lot of debt between 2022 and 2024 despite the high interest rates on personal and credit card loans. To understand those fluctuations the state of the economy at large needs to be considered.
During periods when households feel confident about their financial situation, people are more likely to buy goods and services, and therefore take out loans to finance those purchases. The opposite is also true, which explains why the value of new consumer lending in the UK fell after the financial crisis of 2008, as people were worried about the economy and preferred to save money.
Although consumer lending was just a small fraction of the overall value of loans to households, that segment plays an important role in the economy, fostering consumption.
During periods when households feel confident about their financial situation, people are more likely to buy goods and services, and therefore take out loans to finance those purchases. The opposite is also true, which explains why the value of new consumer lending in the UK fell after the financial crisis of 2008, as people were worried about the economy and preferred to save money.
What are the largest lenders in the UK?
Lloyds, NatWest, Barclays, Santander UK, HSBC, and Nationwide Building Society were the main providers of mortgages and consumer loans in the United Kingdom. Among the credit providers mentioned above, Banco Santander was the only foreign organization. Although its headquarters are in Spain, Santander granted significantly more loans in the UK than in its home country. It is also relevant to know that only a small share of the loans provided by Nationwide was for consumer lending, with most of them being mortgages.Mortgages are much more common than consumer credit
The value of gross mortgage lending dropped markedly in 2020, but it had a strong recovery in 2021. Nevertheless, the largest decline in the value of new mortgage lending occurred between 2007 and 2009. While, as mentioned above, consumer lending had a different evolution during those periods. However, the outstanding amount of consumer credit was very small compared to the amount of lending secured on housing. Outstanding consumer credit to individuals only represented between 10 and 15 percent of the total value of lending secured for housing.Although consumer lending was just a small fraction of the overall value of loans to households, that segment plays an important role in the economy, fostering consumption.
