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Significant increase in mortgage availability says BoE

The availability of mortgages increased significantly over the past quarter, with expectations high for the next three months based on the Funding for Lending scheme, according to the Bank of England today.

The last three months saw the largest increase in secured lending to households since the survey started in 2007.

The results of the Credit Conditions Survey are analysed by calculating the difference between the weighted balance of lenders, while lenders who report larger changes to credit conditions are assigned twice the score of those who say things have changed a little. The scores are also weighted by lenders’ market shares.

The survey’s measure of mortgage availability increased from -4.1 to 21.9 between quarters two and three with a predicted score of 36.1 forecast for the final quarter of 2012.

The Funding for Lending Scheme was widely cited as contributing towards the expected improvement in secured credit availability.

Banks are equally optimistic about the outlook for house prices, higher LTV mortgages and demand for the buy-to-let sector in the third quarter according to The Bank of England’s latest Credit Conditions Survey of UK banks.

Optimism for the buy-to-let sector is also growing as the results of the survey reveal a score of -9.2 for the third quarter but the next three months were given a score of 13.5.

The same cannot be said for borrowers with LTV ratios above 75 per cent as a score of 19.6 in the third quarter is expected to drop to 15.2 in the fourth.

Enterprise Finance CEO Danny Waters says: “”There’s no doubt that the supply of mortgages has increased in recent months as a result of the Funding for Lending scheme.

“Unfortunately, the bulk of the loans being made available has been focused on people who are already spoilt for choice.

“Much the same applies to the corporate sector. Company loans can be secured but not by the companies that need them most, namely the start-ups and SMEs that drive the economy.

“Activity within buy-to-let may have come off the boil slightly relative to the highs of a year ago but it’s still popular and is likely to remain that way given the still stringent criteria of lenders. It remains a market with long-term potential.

“The way people borrow, and where they borrow from, has evolved massively in recent years.”


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  • Antony Weeks 26th September 2012 at 3:31 pm

    What a nonsense article on many fronts:
    Firstly, at street level the supply of mortgages has not increased, or if there is more cash around it is not getting to the borrowers due to hugely restrictive criteria put in place by lenders: interest only issues, self employment issues and so on.
    Secondly, not sure which world the Bank of England think they are in but banks/lenders are restricting borrowing criteria each week it seems to make it harder to borrow any money and if a commercial client or residential client (if over 75% LTV ) is fortunate to have a loan agreed, the terms are punitive. Each week my clients report the banks reducing funding for their businesses or if they are residential not allowing them to move onto new products without fulfilling new criteria which for interest only clients can be a nightmare.
    Thirdly, what sort of statement is “negative 4.1 to 21.9”? What on earth do these figures relate to and even though you offer a token explanation at the end of the article, the figures are utterly meaningless without some form of context. Negative 4.1 what?! Calculating “the difference between the weighted balance of lenders”???? What on earth does this statement mean? Using what indices / data? I’m sorry, I’ve been a broker for nearly 20 years, and have supported Mortgage Strategy since its inception, but articles such as this are very poor and sadly make no sense.

  • Rudolph Hucker 26th September 2012 at 3:19 pm

    “increased from negative 4.1 to 21.9 between quarters two and three with a predicted score of 36.1 forecast for the final quarter of 2012.”

    WTF does this mean?