Lenders expect weak mortgage demand to continue

The Bank of England’s Trends in Lending report shows the top UK lenders expect demand for mortgages to remain weak in the coming months.

Its first lending survey compiles data from Banco Santander, Barclays, HSBC, Lloyds Banking Group, Nationwide and Royal Bank of Scotland.

They attribute a fall in demand for house purchase as a reason for weaker mortgage lending because of factors such as house price falls and fears of unemployment.

But the figures do show applications for mortgages were up by around £20,000 in March 2009 compared with December 2008.

The lenders says this largely reflects seasonal factors and changes in mortgage product ranges, rather than a significant pickup in underlying demand.