The availability of secured credit for households dropped in the three months to August and is expected to fall further in the next three months, lenders have reported to the Bank of England (BoE).

In its latest credit conditions survey, the BoE says that alongside this, demand for secured lending for house purchases both decreased and will do so to a further extent, while demand for the purpose of remortgaging increased and is expected to continue doing so for the next three months.

Specifically, they survey details a net balance of negative 13.3 percentage points when describing how credit availability for secured lending fell in Q3 2022 and a net balance of negative 40.9 percentage points for the short-term future outlook.

The changing economic outlook, with a net balance of negative 28 percentage points for the next three months, is cited as one of the bigger reasons for availability dropping alongside expectations for house prices, registering a net balance of negative 27.2 percentage points for the next three months.

When asked if they have become more willing to lend to borrowers at 90% LTV or above, the last three months saw a net balance of 0.8 percentage points in the positive. For the next three months this has flipped to negative 1.5 percentage points.

And the lenders collectively say that even borrowers asking for 75% LTV or less will struggle to access credit further than they have done previously – here, the net balance moves from a negative 14.9 percentage points in the last three months to negative 39.3 percentage points for the next three months – a sign of tightening credit.

Additionally, overall spreads on securing lending already saw a net balance of negative 7.6 percentage points. For the next three months, this widens, giving a net balance of negative 9.1 percentage points.