The views are reported in the Bank of England’s Credit Conditions Survey, with lenders also expecting remortgaging demand to stall in Q1, despite a small rise in the previous quarter.
The report said that the availability of mortgages failed to improve significantly during the final quarter of 2010 with further falls in house prices and tighter wholesale funding conditions.
As a result of this, lenders expect the level of loans on offer to remain broadly unchanged in the months ahead.
In a further blow to first-time buyers, the BoE also said that the recent house price falls had led to a slight decrease in the availability of mortgages for people borrowing more than 75% of their home’s value.
Lenders reported that the amount of unsecured credit made available to households had fallen slightly over the previous quarter, but was expected to increase over the next quarter. Lenders reported that lower risk appetite had limited availability in 2010 Q4.
Lenders revealed that the availability of credit to small businesses had increased a little in 2010 Q4, for the third consecutive quarter, and expected a further increase over the coming quarter.
