Credit Conditions Survey - 2014 Q3

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

Published on 07 October 2014

The 2014 Q3 survey was conducted between 13 August and 8 September 2014.

After eight consecutive quarters of expansion, lenders reported that the availability of secured credit to households fell significantly in the three months to early-September. Lenders expected availability to increase over the next three months.
Lenders reported that the availability of unsecured credit to households increased in Q3, with a further increase anticipated in Q4.
The overall availability of credit to the corporate sector was unchanged in Q3 according to lenders, and was expected to remain unchanged in Q4.

Demand for secured lending for house purchase was reported to have decreased significantly in 2014 Q3. Lenders expected demand to increase over the next three months.
Lenders reported that demand for credit card lending increased in Q3, and expected a further significant increase in Q4. Demand for other unsecured lending products, such as personal loans, was unchanged in Q3 but was expected to increase significantly in Q4.
Demand for corporate credit from small businesses was reported to have decreased in Q3. In contrast, demand for lending from medium-sized companies increased significantly, and demand from large corporates also increased.

Lenders reported that overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — narrowed in 2014 Q3. And spreads were expected to narrow significantly further in Q4.
Spreads on credit card lending were reported to have been unchanged in Q3 and were expected to remain unchanged in Q4. In contrast, spreads on other unsecured lending products narrowed slightly in Q3, and a further slight fall was anticipated in Q4.
Spreads on lending to small businesses were unchanged in Q3, while spreads for medium-sized companies and for large corporates narrowed significantly. These trends were expected to continue over the next three months.

Lenders reported that default rates on secured loans to households fell significantly in 2014 Q3, and were expected to fall significantly further in Q4. Losses given default on secured loans to households also fell significantly in Q3 and were expected to decrease significantly in Q4.
Default rates on credit card lending and on other unsecured lending were unchanged in Q3. Default rates on credit card lending were expected to increase over the next three months. Losses given default on credit card lending fell in Q3 and were unchanged for other unsecured lending.
Default rates on loans to small businesses increased slightly in Q3. Default rates on loans to medium-sized companies fell and they decreased significantly for loans to large corporates. Losses given default were unchanged for small businesses but fell significantly for medium-sized companies and large corporates.