British households’ demand for secured lending for house purchases is set to fall in the first quarter, the Credit Conditions Survey from the Bank of England showed Thursday.
Although demand for secured lending for house purchase increased in the fourth quarter, it is set to drop slightly, the survey revealed.
Lenders reported that demand for unsecured lending increased in the fourth quarter and is expected to rise further in next three months.
Banks reported that demand for corporate lending from small businesses decreased slightly and demand from medium sized businesses declined whereas demand from large private non-financial corporations increased over the same period.
Demand for corporate lending was expected to fall for small businesses in the first quarter but increase for medium and large businesses over the next quarter.
The survey was carried out between November 23 and December 11.
While the supply of secured credit to households was unchanged in three months to end-November, it is expected to rise over the next three months.
At the same time, the availability of unsecured credit to households increased slightly in the fourth quarter and was expected to remain unchanged over the next quarter.
Lenders reported that the overall availability of credit to the corporate sector was unchanged in the fourth quarter, decreasing for small businesses and remaining unchanged for medium and large firms. Overall availability was not forecast to change in next quarter.
The net percentage balance for changes in default rates on secured loans to households remained unchanged in the fourth quarter, but was predicted to increase in the first quarter. The default rates for total unsecured lending dropped in the fourth quarter but was forecast to rise in the first quarter.
The default rates were expected to increase for all business sizes in the first quarter.
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