Building societies and banks are reducing unsecured lending to consumers, according to the Bank of England.
The Bank’s latest credit conditions survey shows lenders’ expectations for unsecured lending volumes in Q3 fell 13 per cent.
The central bank says lenders “expected a significant decrease in Q4” of 30 per cent, the biggest drop since 2008.
Banks and building societies expected the supply of mortgages and business loans to remain stable.
The tightening of unsecured lending capacity could lead to an uptake in second charge mortgages, according to packager Thistle Finance.
Thistle Finance managing director Mark Dyason says: “There has been a lot of talk in the broker community over the past year about the opportunity surrounding the seconds market and this latest data from Threadneedle Street suggests it is not misplaced.”