“Rising default rates show that underlying pressure is building.” says Karim Haji, Global and UK Head of Financial Services at KPMG.
“The impact of the prolonged conflict on fuel prices is adding new pressure on household finances, and the full impact of higher costs and mortgage rates is still feeding through. Lenders need to strike the right balance between supporting borrowers and managing risk as uncertainty continues.
“Unchanged demand for house purchase lending suggests high borrowing costs and affordability constraints weighed heavy on big-ticket financial decisions, while the rise in remortgaging points to borrowers continuing to refinance as they come off fixed-rate deals earlier.
“At the same time, stable demand for unsecured lending shows households turning to credit to manage their increasing day-to-day spend.
“While some borrowers are still able to access credit, others are beginning to struggle with repayments, pointing to possible early stages of credit deterioration.”
