MNI: BOE Q2 Survey Shows Secured Household Credit Flat-Lining

By Jai Lakhani

     LONDON (MNI) - Secured household credit lending flat-lined in Q2 2018, with

lenders reporting unchanged supply from Q1 and expectations of no pick-up in Q3,

a Bank of England survey published on Thursday showed.

     The BOE Q2 Credit Conditions Survey adds to evidence of a vulnerable

housing market.

     While demand for secured lending increased in Q2 after falling sharply in

Q1, this was driven purely by higher demand for remortgaging, while demand for

secured lending for house purchases was unchanged over the quarter and is

expected to remain unchanged in Q3.

     Both demand and supply for unsecured lending were unchanged in Q2. Lenders

do however expect an increase in demand in Q3, stemming from an anticipated rise

in demand for credit card lending. However, the supply of unsecured lending is

expected to decrease a touch in Q3.

     The percentage balances showed that the availability of secured credit was

a net 4.0% among lenders in Q2, compared to a net 3.8% in Q1 and 1.5% in Q4 --

and still well below Q2 2017's high of 10.0%.

     The unsecured credit availability balance rose to -4.3% from -38.7% in Q1,

when it slumped from -12.4% in the final quarter of 2017. However, the balance

is expected to fall to -7.7% in the third quarter.

     The UK housing market has lost steam recently, partly owing to the hit to

disposable incomes from the rise in inflation which followed the Brexit vote in

2016, as well as relatively subdued earnings growth.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

[TOPICS: MABDS$,M$B$$$,M$E$$$]