Households in London have the highest value of outstanding personal loans, with the amount owed rising 18% in four years

10 August 2018

- Average household in the capital has £1,805 outstanding [1], while in 2013 this figure was just £1,524

- The postcode with the highest level of outstanding personal loans in the UK is Uxbridge in West London, where the average household has £1,911 to pay back

- Three of the five postcodes areas with the highest personal loan debt in the UK are in Greater London and include Ilford and Harrow

A new report reveals households in London have the highest value of outstanding personal loans with nearly £1,805 owed (see Figure 1), compared to an average in Great Britain of £1,371. Analysis by the Centre for economics and business research (Cebr), on behalf of Shawbrook Bank, suggests households in the capital take out larger personal loans than those in the rest of the UK.

The postcode with the highest value of outstanding personal loans is Uxbridge in West London, where households owe £1,911 on average. Two other Greater London postcodes make up the top five, Ilford (£1,834) and Harrow (£1,822, along with Slough and Salisbury in the South West and South East respectively.

For all of the UK’s regions, the average value of outstanding loans per household has increased significantly between 2013 and 2017 by an average of nearly 19%. In the capital the amount outstanding has risen from £1,524 to £1,805 during this four-year period, representing an increase of 18%.

Average incomes in London are higher than the rest of the UK, which explains to some extent why households in the capital are able to service larger loans. But when adjusting the average value of outstanding personal loans per household compared with average levels of income in each region, the picture looks drastically different. The North East (5.3%), North West (5.3%) and Yorkshire & Humber (5.2%) show as having the highest level of outstanding personal loans by household income, while London has the second lowest at just 4.2% (see Figure 2).

Chart showing value of outstanding loans as a share of income

While the report reveals Londoners may be more comfortable with the outstanding value of their loan, borrowers in the capital could be paying more for their loans than initially expected. The report finds the average APR paid by a borrower for a fixed rate loan is currently 7.3% whereas the representative rates advertised by leading UK lenders for the average loan value (of £9,000) ranges from 2.8% to 4.9%.

The potential discrepancy in rates may not be something most Londoners are aware of, the vast majority (86%) of loan applicants surveyed* in the capital expect to get the advertised representative rates but current rules dictate just over half (51%) are actually required by regulators to get them.

Paul Went, Product and Markets Director at Shawbrook Bank says:

“The study reveals borrowers in London are taking out larger loans than their counterparts in other areas of the UK, but with higher average incomes in the capital households generally have greater financial flexibility.

“The bad news is that Londoners may not be aware they could be paying more for their loans than they bargained for. There is clear disparity between so-called representative rates and the rates borrowers actually end up paying. This is leading to some confusion among loan applicants we surveyed in London and is, arguably, misleading borrowers.

Went continues: “The growing scale and significance of the personal loans market means that it’s more important than ever to ensure loan applications are as transparent as possible for people. A widening gap between expectation and reality when it comes to loans is bad for all concerned. 

Went concludes: “We believe that’s the wrong way to do things and two thirds of the borrowers we surveyed strongly support that view. As a result we are making a clear commitment to how we advertise and market our personal loans, and hope that this will lead other lenders to consider the approach they take. Our new Charter includes five clear promises to ensure that people don’t feel misled when they come to Shawbrook.”

To view Shawbrook’s Transparency Charter and its five promises to prospective borrowers in full visit:

Chart showing value of outstanding personal loans per household by UK region


Our consumer survey was conducted by 3Gem Research, and was undertaken between 22nd March and 29th March. The total sample size was 1,500 adults who had applied for a personal loan within the last two years. The sample was weighted by age, region and gender so as to be representative of the national pool of recent loan applicants. Data published by the Bank of England (BoE) on consumer credit and interest rates on personal loans, as well as the BoE’s quarterly credit conditions survey, were used to supplement this primary research. UK Finance’s dataset on lending by postcode sector was used to develop regional insights into how household borrowing varies across the UK.

[1] Based on the latest available data from UK Finance, which was analysed by the Cebr