New research by the Financial Conduct Authority (FCA) and the Bank of England, suggests the 10% increase in borrowing, which we have seen in recent years, is being driven, not by sub prime borrowers, but those with better than average credit ratings.

The research, which was carried out by the FCA, and was based on data provided by Credit Reference Agencies, for one in ten UK Consumers, also found consumer credit borrowing in the UK was being driven by borrowers without mortgages.

This suggests the increased borrowing is either being taken out by people who own their property outright, or by people who do not own their property at all, and rent instead.

Finally, the study also found that people were remaining in debt longer and although people may be clearing their balances on products sooner, their overall indebtedness was not falling, suggesting they were possibly switching to 0% interest products.

What the study suggests to me, is although the rise in debt may well be by those with above average credit ratings, the fact that borrowers were not clearing their debts, but switching them, means the long term affordability of their borrowing may be getting masked.

The fact the report did not decisively identify who the group were that did not have mortgages, also makes me suspect it may be younger, financially savvy borrowers, who know how to protect their credit ratings, but still lack the means to get on the property market or clear their debts.