The 2016 Q3 survey was conducted between 23 August 2016 and 14 September 2016.
Supply
- The availability of secured credit to households was reported unchanged in the three months to mid-September 2016, and was expected to remain unchanged in Q4. Credit scoring criteria tightened slightly in Q3, for a second consecutive quarter, and lenders reported that the proportion of household loan applications being approved declined in Q3.
- Lenders reported that the availability of unsecured credit to households increased in Q3. The availability of other unsecured lending products, such as personal loans, appeared to increase again in Q3: credit scoring criteria continued to loosen, while the proportion of loan applications approved increased slightly.
- The overall availability of credit to the corporate sector was reported to have been unchanged in Q3 for the tenth consecutive quarter. Availability of credit to the commercial real estate sector was also unchanged in Q3, after falling in the previous quarter for the first time since 2012 Q2.
Demand
- Lenders reported that demand for secured lending for house purchase fell significantly in 2016 Q3. Within this, both demand for prime and buy-to-let lending decreased significantly, and the latter recorded the largest fall since the Credit Conditions Survey began in 2007 Q2. Lenders expected overall demand, and demand for prime and buy-to-let, to increase in Q4.
- Demand for other unsecured lending products was reported to have increased slightly in the three months to mid-September, after four consecutive quarters of significant increases. Demand for credit card lending was also reported to have increased in Q3.
- Lenders reported that overall demand for corporate lending from small, medium and large businesses decreased significantly in the three months to mid-September. Demand for lending from small and medium-sized businesses was expected to be unchanged and continue to decrease, respectively, in Q4. Demand from large business was expected rise slightly in Q4.
Loan pricing
- Overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — were reported to be unchanged in 2016 Q3, and were expected to remain unchanged next quarter. Fees, maximum loan to value and income ratios on secured lending were all unchanged in Q3, and were expected to remain unchanged in Q4.
- Lenders reported that spreads on other unsecured lending products widened significantly in Q3, but this was expected to be offset by a narrowing over the next quarter. Spreads on credit card lending were unchanged in Q3, and expected to widen slightly in Q4.
- Spreads on lending to medium-sized businesses narrowed significantly in the three months to mid-September, but were expected to widen in Q4, and fees declined slightly. Spreads and fees on lending to small and large businesses were both reported unchanged in Q3.
Defaults
- Lenders reported that default rates on secured loans to households fell in 2016 Q3, for the thirteenth consecutive quarter, and were expected to fall again in Q4. Losses given default on secured loans to households were unchanged in Q3, and were expected to rise slightly in Q4.
- Default rates on other unsecured lending rose significantly in Q3, recording the largest positive balance since 2009 Q2, but were expected to fall in Q4. Default rates on credit card lending to households were reported to have increased slightly in Q3.
- Lenders reported that default rates on loans to small, medium and large businesses were all unchanged in Q3. Losses given default on loans to small businesses fell for a sixth consecutive quarter, but were unchanged for medium and large businesses.
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Results for Annex 1, 2 and 3