Latest Q3 Credit Conditions survey from the BoE noted that the availability of secured credit to households saw a significant improvement in the three months up to the start of September 2012. There was also a significant increase in expectations during the following three months, with the BoE’s FLS scheme attributed as the driving factor. In the same note, unsecured credit to households remained unchanged during the period including the availability of credit to the non financial corporate sector but lenders expect to see this change during the fourth quarter of this year with expectations of a modest increase.
The increase in lending of secure credit marks the largest reported increase since 2007.
The Funding for Lending scheme which was announced in July and got underway in August saw five of Britain’s biggest banks signing up for the scheme. The FLS offers banks cheap finance based on their increase in lending to businesses and households.
Other indicators in the survey pointed to tighter conditions for secured household lending with the credit scoring criteria being tightened over the quarter but consistent with the slight increase in the average credit quality for new lending.
The survey also showed that the prime lending for house purchase increased in moderate growth during the third quarter while the buy to let lending saw small declines.
To read the original version of the BoE’s Credit Conditions survey, click here
About the BoE Credit Conditions Survey
In order to maintain and promote monetary and financial stability, the Bank of England closely follows the trends in the country’s credit conditions. Released every quarter, the BoE Credit Conditions Survey takes into account inputs from both bank and non bank lenders and takes into account both secured and unsecured lending to households including non financial corporations. The survey provides quarterly trends in lending and also presents the BoE’s assesment of the lending and credit conditions in the UK’s economy.