Mortgage default levels could rise

According to a recent report the number of homeowners that are defaulting on their mortgage repayments in the UK is set to rise over the coming three months. The data comes from a survey that was carried out by the Bank of England amongst lenders and formed part of the central bank’s quarterly survey on credit conditions.

Over the past three months default levels amongst UK homeowners is said to have remained relatively flat. However, the figures showed that the balance of lenders who were expecting the rate of defaults on mortgage loans to increase rose to its highest level since the end of 2009.

The survey also showed that banks were not expecting to see any sharp increases in lending over the coming months, with the outlook for bad debts being cited as one of the reasons why banks may remain reluctant to lend in the immediate future. One economist said that the Bank of England report had nothing in it that suggested banks were likely to start lending more soon.

According to the data there has also been little in the way of change over the last three months when it comes to the availability of personal loans, mortgages and business loans. The data indicated that there could be an increase in unsecured lending to households over the next three months but that mortgage lending was likely to remain flat.

The report did indicate that there had been a marked improvement in the buy to let sector in the UK, with demand for buy to let having increased over the past few months. Lenders are expecting this improvements to continue over the coming few months and for the remainder of this year according to the report.

Tags: Federal Housing Administration, improvements, bank, business loans, quarterly survey

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