Some families may find it difficult to get a mortgage and other forms of debt in the coming months, amid expectations from lenders that many may default on their debts.
Lenders expect mortgage and other home loan availability to decline by the end of February 2023, Fourth Quarter survey finds Bank of England loan.
Lenders also reported that interest-free periods on credit cards for balance transfers and purchases were reduced by the end of 2022, and are expected to drop further early. it’s 2023.
The ratio of mortgage and non-mortgage loans to households is predicted by lenders to increase in early 2023, the study found.
Disability costs are also expected to rise for businesses of all sizes.
There are also loans in the private sector that lenders also predict will decrease slightly by the end of February.
The demand of families for mortgages to buy their houses is expected to decrease in the coming months, but it is thought that the demand for remortgage will increase slightly.
Household demand for credit cards is expected to decrease slightly.
In business, the demand for loans is expected to remain unchanged in small businesses and is predicted to decrease for medium and large businesses.
The Survey of Credit Status of banks and construction companies is carried out every quarter, as part of the Bank’s mission to maintain financial stability.
The findings do not reflect the Bank’s views on credit conditions.
Investors were asked to report changes in the three months until the end of November 2022 compared to the period between June and August.
They were also asked about their expectations for December 2022 to the end of February 2023.
The research for the latest report was conducted between November 21 and December 9 2022 so that it is not possible to capture any impact from recent developments.
Justin Moy, founder of EHF Mortgages, based in Chelmsford in Essex, said: “Demand was strong at the start of the autumn as many borrowers moved to get better deals before in the mini-budget.”
But when mortgage rates soared, he said many borrowers “feared or bided their time”.
Kylie-Ann Gatecliffe, director of broker KAG Financial, based in Selby in Yorkshire, said: “I believe we will see more (disruption) this year if people feel the pressure from the winter of rising energy prices.
“One area of concern is that lenders expect the availability of mortgages to decrease in the next quarter.”