Lenders surveyed reported an increase in secured lending to households in the first quarter of 2013 which was expected to continue. They suggested the increase would be more marked for borrowers with loan-to-value ratios above 75%.
At the same time, they predicted a fall in rates on loans as the difference between the cost of funding the loan and the price at which they sold the loan narrowed.
Many lenders cited Funding for Lending as a factor pushing down on bank funding costs and, in turn, lending rates.
The report stated: “In the three months to beginning-March, lenders reported an increase in the overall availability of secured credit to households for the third consecutive survey.
“Lenders reported that market share objectives had been the main contributor to the rise in availability in 2013 Q1, although an increased appetite for risk and improved wholesale funding conditions had also played a role.”
An increase in demand for mortgages was also noted in quarter one and lenders expected demand for prime loans and buy-to-let loans to increase in the second quarter.
The views of lenders now, contradict 2013 figures suggesting a fall in the number of loans approved.
