- The availability of unsecured credit to UK households decreased again in the fourth quarter, such that reductions occurred in all four quarters of 2017.

Lenders expected a significant decrease in the first quarter of 2018.

Credit scoring criteria for granting total unsecured loan applications tightened again in Q4, and lenders expected them to tighten significantly further in Q1, according to the Bank of England survey.

The availability of secured credit to households was unchanged in the three months to mid-December 2017 and lenders expected no change over the next three months to mid-March 2018.

Household demand for secured lending for remortgaging increased significantly in Q4. At +49, the net percentage balance suggested the largest quarter-on-quarter change in demand for this type of lending since the falls reported in early 2009.

Demand for secured lending for house purchase was reported to have increased slightly in Q4.

While demand for credit card lending was reported to be broadly unchanged in Q4, demand for other unsecured lending was reported to have fallen significantly). This is the first material reported fall in demand for either component of unsecured lending since the fourth quarter of 2015. No further changes in demand for unsecured lending were expected for Q1.

Lenders reported a slight decrease in demand for lending from large PNFCs, and expected this to decrease significantly in Q1. Overall demand for corporate lending from small and medium businesses was reported to be unchanged in Q4.

Overall spreads on secured lending to households - relative to Bank Rate or the appropriate swap rate - were reported to have narrowed significantly in Q4 and were expected to be unchanged in Q1. This was the case for spreads on both buy-to-let and prime lending.

Lenders reported that overall unsecured lending spreads tightened in Q4, and expected them to be unchanged in Q1. The length of interest free period for balance transfers on new credit card lending decreased significantly in Q4 and was expected to decrease significantly again in Q1.

Spreads on lending to businesses were unchanged for medium-sized firms in Q4, but widened on loans to small businesses and widened slightly for large PNFCs. They were expected to widen on lending to small and medium sized businesses in Q1.

Default rates on secured loans to households fell significantly in Q4, and are expected to fall further in Q1. Losses given default on secured loans were unchanged in Q4 and were expected to remain unchanged in Q1.

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