Mortgage demand will fall further, say lenders

Demand for secured lending for house purchases fell markedly in the final quarter of 2010 and is expected to fall further this quarter, according to lenders surveyed in the Bank of England's latest Credit Conditions Survey.

The survey, which was conducted between 12 November and 7 December, highlighted a range of trends covering supply, demand and defaults experienced by lenders.

Lenders commented that this reflected a recent fall in house prices, a general weakening of sentiment towards the housing market and uncertainty over the economic outlook that was associated with the Government's spending review.

Lenders reported that the availability of secured credit to households was broadly unchanged in the three months to December 2010 and was expected to remain at a similar level over the next three months.

Unsecured credit availability was reported to have fallen a little in the previous quarter but lenders said they expected that availability would increase in the next quarter.

Meanwhile, lenders reported that the default rate mortgages remained broadly unchanged in the final quarter of 2010.