News: Mortgage Conditions To Improve, Says BoE

Fri, 03 Jul 09

Mortgage lending conditions are set to improve over the coming months, according to the Bank of England’s latest Credit Conditions Survey.

Lenders responding to the survey said they had already increased the availability of secured credit to households over the last three months. A net balance of lenders was expecting a further increase in the availability of secured credit over the next three months.

The survey also found that demand for mortgages had increased over the last three months, however demand for remortgaging was down over the same period.

Council of Mortgage Lenders economist Paul Samter said that the improvements in credit availability highlighted in the survey are likely to lead to better mortgage deals for borrowers over the coming months.

He said: “The positive news is that there was a small increase in the availability of credit in the second quarter, and lenders expect this trend to continue in the next few months, with a modest expansion in access to mortgages at higher loan-to-value and loan-to-income ratios.” 

However he warned that not all lenders would be able to offer improved deals, as some had been hit harder than others by the economic recession.

Those that had benefited from Government handouts through the asset protection scheme were in a better position to loosen their grip on lending, he said, adding, “while there are some encouraging signs, a rapid return to pre-credit crunch lending volumes and products remains extremely unlikely.”



By Joe Lepper

See also: Mortgages

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