The Bank of England has published the results of the credit conditions survey for Q3.  The survey of bank and building society lenders is intended to assess trends in the demand for, and the supply of credit, including terms and conditions.  The results show that:

  • The availability of secured credit to households was reported to have increased in Q3 2015, and lenders expected availability to continue to increase over Q4.  By contrast, the availability of unsecured credit to households was unchanged, however the availability of other unsecured lending products (such as personal loans) appears to have increased in Q3.
  • Demand for secured lending for house purchases increased significantly in Q3, particularly so for buy-to-let lending, however overall demand is not expected to increase again in Q4. Demand for credit card lending from households also increased in Q3.
  • Spreads on secured lending to households have narrowed significantly in Q3, and is expected to narrow again over Q4. Lenders also reported that spreads on credit cards, lending to medium and large companies, and other unsecured lending products had narrowed in Q3.  Lenders also reported an increase in the length of interest-free periods for purchases on new credit card lending.
  • Default rates on secured loans to households fell in Q3, and are expected to fall again in Q4. Default rates and losses given default on credit card lending to households fell in Q3.