Household credit availability continues to increase

Quarterly data from the Bank of England has found that lenders reported the availability of both secured and unsecured credit to households increased in the three months to end-August 2025 (Q3) and is expected to increase over the next three months to end-November 2025.

Household demand for secured and unsecured lending for house purchase remained unchanged in the latest quarter and was expected to remain so in Q4. Within the overall figure, demand for credit card lending slightly decreased in Q3, and was expected to be unchanged in Q4. In further positive news, default rates on secured loans to households fell in Q3, and were expected to fall again in Q4, while default rates for unsecured lending were unchanged in Q3, and were expected to increase in Q4.

Commenting on the date Richard Pinch, Senior Director, Risk, at Broadstone, said “The latest Credit Conditions Survey points to an encouraging fall in default rates and a boost in the availability of household credit in the three months to August 2025.

“While the summer months appeared to have lifted supply of household credit, demand for household borrowing remained unchanged, perhaps in reflection of consumers holding fast amid growing uncertainty around the Chancellor’s looming Autumn Budget in November.

“While the market is continuing to show welcomed signs of resilience, the final months of the year could rock household confidence if any tax hikes or other major policy changes are announced in the Budget. Lenders should ensure they continue to offer flexible options that suit the long-term financial interests of all their customers and stand ready to protect borrowers and themselves against any headwinds.”