UK Mortgage Default Rates To Rise In Q4: BoE Survey

(RTTNews) - UK lenders expect default rates on secured loans to households to rise again in the fourth quarter, according to the Credit Conditions Survey, published by the Bank of England.

However, default rates for total unsecured lending dropped slightly in the three months to August and they expect it to remain stable in the fourth quarter.

Regarding loans to corporates, lenders said the default rates for all business sizes remained unchanged in the third quarter and also expected it to be unchanged for all business sizes in the fourth quarter. Further, availability of secured credit to households increased in the third quarter and expected it to be unchanged in the coming three months. At the same time, availability of unsecured credit to households rose slightly in the third quarter and forecast it to rise again in the fourth quarter.

Banks said the overall availability of credit to the corporate sector was unchanged in the third quarter. Availability for small businesses was unchanged, while medium-sized and large business availability increased slightly in the third quarter. Overall availability was expected to be unchanged in the fourth quarter.

Regarding demand, lenders said demand for secured lending for house purchase was unchanged in the third quarter and was expected to climb in the fourth quarter.

Lenders said demand for unsecured lending will fall slightly in the fourth quarter after remaining unchanged in the third quarter. Overall demand for unsecured lending was unchanged in the third quarter but it will fall slightly in the coming three months, respondents said.

Demand for corporate lending from businesses of all sizes was unchanged in the third quarter. Demand for corporate lending was expected to fall slightly for small business, and increase slightly for medium-sized businesses and to rise for large businesses.