Mortgage availability to households is expected to increase over the three months to the end of May, according to a Bank of England survey of lenders. The survey also predicted a rise in non-mortgage credit availability in the coming months.
The Bank of England’s Credit Conditions Survey, conducted between 23 February and 13 March, does not capture more recent developments. Mortgage rates and other household costs have jumped in recent weeks due to the conflict in the Middle East putting upward pressure on prices.
The Royal Institution of Chartered Surveyors (Rics) said on Thursday that the housing market was losing momentum in March, as rising borrowing costs and wider geopolitical uncertainty weighed heavily on buyer confidence and sales activity.
Karim Haji, global and UK head of financial services at KPMG, said: '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.'
Demand for mortgages from home buyers was unchanged in the previous three months but is expected to increase in the three months ahead. Demand for remortgaging increased in the previous three months and is also expected to rise. Demand for non-mortgage lending, such as credit cards, is expected to remain unchanged over the next three months.
Lenders reported that default rates for non-mortgage lending increased in the previous three months and are expected to increase slightly in the next three months. Demand for business lending in the next three months is expected to increase slightly for small businesses, decrease slightly for medium-sized businesses, and remain unchanged for large businesses.
