Lending for houses increased in Q4

The Bank of England’s quarterly credit conditions survey finds that lenders reported that demand for secured lending for house purchases increased in Q4 2024, but was expected to decrease in Q1 2025. Demand for secured lending for remortgaging also increased in Q4 2024, but similarly was expected to decline in Q1 2025.

Lenders also reported that the availability of secured credit to households increased in the three months to end-November 2024 (Q4) and was also expected to increase over the next three months to end-February 2025 (Q1). Likewise, lenders reported that the availability of unsecured credit to households increased in Q4 and was expected to increase slightly in Q1.

Default rates on secured loans to households slightly increased in Q4 2024 while rates for total unsecured lending decreased in Q4 2024 but were expected to increase in Q1 2025.

Tom Cuppello, Director at Broadstone, said “The Bank of England’s latest Credit Conditions Survey highlights increasing demand for borrowing through the final quarter of the year despite the increasingly strained economic outlook. Activity is likely to be depressed in the opening quarter of 2025 which suggests the deterioration in the nation’s finances is likely feeding through into household behaviours on their finances.

“It is pleasing that the availability of credit appears to be continuing to rise, offering more options to consumers. However, borrowers should be mindful of potential cost increases and increasing defaults seen recently especially given the current market uncertainty.

“Lenders need ensure they are supporting the long-term financial interests of their customers. The Government’s Mortgage Charter, the advent of Consumer Duty and additional regulation demonstrate that the legislative direction of travel is towards protecting borrowers in turbulent economic times.”