Lenders reported that secured credit available to households lifted in the three months to the end of August, but demand for house purchases was unchanged, Bank of England data shows.  

Institutions said the availability of secured credit rose by a net percentage balance of 10.0 in the third quarter of the year, from 2.0 in the previous quarter, citing changing economic conditions and their risk appetites. 

They expect this to rise to a balance of 22.4 in the final three months of the year, according to the Bank’s latest credit conditions survey. 

Demand for remortgaging eased slightly to a net balance of minus-17.7 from minus-20.4 in the previous three months. Lenders expect this to jump to a net balance of 60.0 in the final three months of the year. 

Institutions reported that overall spreads on secured lending to households – relative to Bank rate or the appropriate swap rate – narrowed in the third quarter, but are expected to be unchanged in the final three months of the year. 

Also, default rates on secured loans “slightly decreased” in the three months to August, according to lenders, and are expected to fall again in the final quarter of the year. 

SPF Private Clients chief executive Mark Harris says: “Lenders remain keen to lend and have the funds available to do so.  

“The past few months have seen them easing affordability criteria, increasing the borrowing potential of many mortgage applicants.  

“Demand from borrowers remained unchanged during the third quarter, which is a nod to the resilience of the market and the desire of many buyers and sellers to get on with their moves.  

“It is more impressive given that the data covers the summer months when one would normally expect less interest in buying and selling as attention turns to holidays.  

Harris adds: “Overall spreads on secured lending narrowed following a number of rate reductions from the Bank of England and lower swap rates, which underpin the pricing of fixed-rate mortgages.  

“Although borrowers have had to get used to rock-bottom rates being a thing of the past, mortgage rates are fairly steady, enabling borrowers to plan ahead with more confidence.”

Broadstone senior director, risk, Richard Pinch says: “While the summer months appeared to have lifted supply of household credit, demand for household borrowing remained unchanged, perhaps in reflection of consumers holding fast amid growing uncertainty around the Chancellor’s looming Budget in November.

“While the market is continuing to show welcomed signs of resilience, the final months of the year could rock household confidence if any tax hikes or other major policy changes are announced in the Budget.”