The 2019 Q1 survey was conducted between 4 and 22 March 2019.
Supply
- Lenders reported that the availability of secured credit to households had increased slightly in the three months to end‑February 2019 (Q1) and was expected to be unchanged over the next three months to end‑May 2019 (Q2).
- The availability of unsecured credit to households was reported to have decreased in Q1 and was expected to decrease further in Q2 (Chart 1). Credit scoring criteria for total unsecured loan applications were reported to have tightened slightly in Q1, with the proportion of applications approved reported to have decreased slightly.
- The overall availability of credit to the corporate sector was reported to have remained unchanged in Q1, and this was the case for small, medium and large businesses. The overall availability of credit to the corporate sector was expected to remain unchanged in Q2.
Demand
- Lenders reported that demand for secured lending for house purchase was unchanged in Q1, and was expected to decrease in Q2. However, demand for secured lending for remortgaging increased significantly in Q1, with demand expected to increase again in Q2 (Chart 2).
- Overall demand for unsecured lending was unchanged in Q1; this was due to a slight increase in demand for credit card lending combined with a slight decrease in demand for other unsecured lending. However, lenders expected a decrease in the demand for credit card lending in Q2, with demand for other unsecured lending expected to decrease slightly (Chart 3).
- Lenders reported a decrease in demand for corporate lending from businesses of all sizes in Q1 (Chart 4). Lenders expected demand for corporate lending to remain unchanged for small businesses, decrease slightly for medium PNFCs and decrease for large PNFCs in 2019 Q2.
Loan pricing
- Overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — were reported to have remained unchanged in 2019 Q1, however they were expected to widen in Q2 (Chart 5).
- Lenders reported that overall unsecured lending spreads were unchanged in Q1, and were expected to remain unchanged in Q2. The length of interest free periods for balance transfers and new purchases on new credit card lending both decreased significantly in Q1, with both expected to decrease significantly in Q2.
- Spreads on corporate lending to small businesses narrowed in Q1, while they remained unchanged for medium and large PNFCs. Spreads on corporate lending to businesses of all sizes were expected to remain unchanged over the next three months.
Defaults
- Lenders reported that default rates on secured loans to households were unchanged in Q1, and expected these to remain unchanged in Q2. Losses given default on secured loans were unchanged in Q1, and were expected to increase over 2019 Q2.
- Default rates increased significantly for total unsecured lending in Q1. This was driven by a significant increase in default rates on credit card loans (Chart 6). Lenders expected default rates for total unsecured lending to decrease slightly in Q2.
- Lenders reported that default rates on loans to corporates increased slightly for small businesses in Q1, while they remained unchanged for medium‑sized businesses and increased for large businesses. However, losses given defaults were unchanged for small and large business but were reported to have decreased for medium‑sized businesses. Default rates were expected to increase for medium and large businesses in Q2, but were expected to increase slightly for small businesses.
Credit Conditions Survey - 2019 Q1
Results for annex 1, 2 and 3