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MNI (London)
By David Robinson and Jai Lakhani
     LONDON (MNI) - The Bank of England's third quarter credit conditions survey
found that lenders reported mortgage availability shrunk in the third quarter
and was expected to atrophy more rapidly in the fourth, while lending spreads
were expected to narrow markedly.
     -The survey highlights how the BOE Monetary Policy Committee's two rate
hikes are only trickling through to borrowers, as spreads are tightening.
     The survey said that spreads on secured lending to households, relative to
both Bank Rate and swap rates, narrowed slightly in the third quarter and "were
expected to narrow significantly in Q4."
     This spread narrowing is occurring in both the buy-to-let and residential
mortgage sectors.
     -The availability of secured credit to households declined in the third
quarter and was expected to decrease further in the fourth quarter.
     The balance of lenders expecting to increase secured credit in the fourth
quarter fell to -14.8 from a balance of 4.0 in the second quarter.
     -The survey found that demand for secured borrowing was flat-lining. In the
third quarter the balance of demand for secured lending was -3.4, worse than the
expected 0.7 and was expected to move back to 0.2, virtually flat, in the fourth
quarter.
     -Two areas where demand rose were re-mortgaging and unsecured lending.
     The BOE data showed overall demand for unsecured lending increased
significantly in Q3 due to credit card lending.
     Lenders, however expected a slight decrease in the demand for unsecured
credit in Q4.
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$B$$$,M$E$$$,M$$BE$]
MNI London Bureau | +44 203-586-2223 | david.robinson@marketnews.com