Lenders have reported decreasing demand for secured lending for both house purchase and remortgaging in the second quarter of 2020, but this demand is expected to increase in Q3, according to new research from the Bank of England (BoE).

The bank’s Credit Conditions Survey 2020 Q2 indicted that lenders had also reported the availability of unsecured credit to households decreased in the second quarter of the year.

The survey, conducted between 1 and 19 June, revealed this availability of unsecured credit to households is also expected to decrease further in the third quarter of 2020.

Interpreting the BoE’s data, Coreco managing director, Andrew Montlake, commented: “With lenders expecting demand for mortgages to rise in the third quarter and supply to fall, the property market clearly has some significant challenges ahead.
 
“Job losses, as we saw on Thursday, are rising and so lenders are understandably nervous, especially at higher loan to values. These nerves are reflected in the widening of spreads. There is a lot of pent-up demand right now but lenders are tightening their criteria and generally being more cautious, with many expecting default rates to rise.
 
“There are still lenders out there who are keen to get money into the market but finding them can be a challenge in itself. With lender criteria and appetites changing almost by the day, the role of independent brokers has never been more important.”

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