Bank: loan demand unchanged
The survey, conducted between 25 February and 19 March, suggested that the Bank of England expected more lenders to reduce their product offerings during the next three months.
It also admitted that it expected interest, and house purchases, to decrease over the year as a result of falling confidence in the UK housing market.
However, despite the announcement that demand had remained stable, and an increase in the spread of mortgage products used for purchases, the survey revealed a rise in defaults on secured lending to households, which it expected to continue during 2008.
On the expectations for the next three months, the paper said: ‘Lenders expected the availability of credit to be reduced further over the next three months, again reflecting reductions in risk appetite and concerns about the macro-economic outlook.’
Peter O’Donovan, mortgage manager at Bestinvest, commented: “We have seen less enquiries but the borrowers we have seen are keen to get something sorted quickly.
“The market conditions have got rid of those who were dipping their toes in, or just looking at the possibility of buying or selling their properties.”
He added: “The market uncertainty has gone on for so long now that I expect new mortgage applications to go down but remortgages should increase.”