Lenders gloomy on mortgage funding
by Gill Montia
Story link: Lenders gloomy on mortgage funding
Lenders have reported that the availability of secured credit to households rose slightly in the three months to 9th June 2010 but is expected to fall back in the next three months, in part reflecting expectations that wholesale funding market conditions might tighten.
In its latest Credit Conditions Survey, the Bank of England has also reported that demand for house purchase mortgages fell “somewhat”, while demand for remortgaging rose for the first time since the final three months of 2008.
Unsecured credit availability remained broadly unchanged for a second consecutive quarter with demand increasing in the three months to 9th June, especially for non credit card lending.
Lenders expect demand for credit card lending to stabilise in the next quarter and demand for non credit card lending to fall back a little.
Availability of credit to corporates increased during the period covered by the survey, although by less than lenders had expected and while demand for credit from private non-financial firms rose among small businesses, it fell unexpectedly among large companies.
Looking ahead, lenders expect availability to increase slightly alongside a further rise in demand from small businesses and a continued contraction in demand from large companies.