A minor reduction in the availability of secured credit to the market over the next three months has been predicted by lenders.
The latest Bank of England Credit Conditions Survey asked lenders to outline their predictions for the market over the next three months. A key finding from the survey was that buy to let lending demand is expected to see slight decline in the near future. It was found that lenders anticipate a slight reduction in the availability of secured credit, something which is expected to affect borrowers with LTV ratios of over 75 per cent. Those with an LTV ratio of over 90 per cent are also particularly vulnerable
The drop in supply of credit that was predicted by the lenders surveyed was attributed by them to a ‘changing appetite for risk.’
It was also reported by lenders that demand for prime lending increased, whilst demand for buy to let investment lending decreased significantly throughout the second quarter of 2017.
The lenders questioned by the survey were said to expect total demand for secured lending for property purchase to increase in quarter three, driven by an sizeable increase in buy to let lending and a more steady increase in prime lending. Finally, demand for remortgaging was reported to have seen slight decline in quarter two, but was expected to remain unchanged in quarter three.
It was also noted by respondents that the availability of unsecured credit to households had decreased in the second quarter of 2017. Further decline is also expected during quarter three as lenders offer less consumer credit to the market.
The survey results came through as scoring criteria for granting both credit card and other unsecured loans was once again tightened in quarter two, a move that lenders expect will be repeated in quarter three.