Credit Conditions Survey - 2008 Q1

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

Published on 03 April 2008

Lenders reported that they had reduced the availability of secured credit to households over the three months to mid-March in line with their expectations in the Q4 survey. They expected a slightly larger reduction in secured credit availability over the next three months.
Household unsecured credit availability was reported to have been reduced over the past three months. Lenders expected to reduce unsecured credit availability somewhat further over the next three months.
Corporate credit availability had been reduced over the past three months, consistent with lenders’ expectations in Q4. A further slightly smaller reduction in corporate credit availability was expected over the next three months.

Demand for secured lending for house purchase was reported to have been broadly unchanged over thepast three months. Lenders expected demand for secured lending for house purchase to fall over the next three months.
Lenders said that demand for credit by medium-sized non-financial corporations had fallen slightly over the past three months. Demand for credit by large non-financial corporations was broadly unchanged.

A marked increase in spreads on secured lending to households for all types of borrowers was reported over the past three months. Some further increases were expected over the next three months.
Lenders reported that spreads on corporate lending had increased significantly over the past three months. They expected a further marked increase in spreads.

Default rates and losses given default on secured lending to households were reported to have risen over the past three months, broadly in line with their expectations in the Q4 survey. Looking ahead, lenders expected both default rates and losses given default on secured lending to rise further.
Lenders reported that default rates by medium-sized and large non-financial corporations had picked up more sharply than expected over the past three months. Default rates were expected to increase further over the next three months.