Credit Conditions Survey - 2007 Q3

This quarterly survey of banks and building societies is aimed at improving our understanding of trends and developments in credit conditions.
Published on 26 September 2007

Supply

  • Lenders reported that the availability of secured credit to households was unchanged over the three months to mid-September. And despite recent turbulence in financial markets, they expected the availability of secured credit to remain largely unchanged over the next three months.
  • Lenders reported that they had reduced slightly the availability of unsecured credit to households over the past three months. They expected the availability of unsecured credit to remain broadly unchanged over the next three months.
  • Lenders reported that they had reduced corporate credit availability over the past three months. They expected recent market developments to reduce significantly their capacity to extend corporate credit over the next three months.

Demand

  • Household demand for secured lending rose slightly over the past three months, associated with stronger demand for buy-to-let lending. The demand for unsecured lending was unchanged.
  • Lenders reported that demand for lending by private non-financial corporations fell over the past three months, associated in part with weaker demand from the commercial real estate sector.

Terms and conditions

  • Having reported easing conditions in the Q2 survey, lenders reported that they had tightened price terms on loans to corporates over the past three months. They expected, on balance, a further significant tightening of price and non-price terms on loans to the corporate sector over the next quarter.

Default rates

  • Lenders reported that the level of defaults on secured loans to households over the past three months was lower than had been anticipated in the Q2 survey. However, they expected defaults to rise modestly.
  • Default rates on corporate loans were little changed over the past three months. Over the next three months, lenders expected defaults by medium-sized corporates to rise, although defaults by large corporates were expected to remain broadly unchanged.

PDFCredit Conditions Survey - 2007 Q3

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