Lending from banks becomes even tighter
According to a recent report lending amongst UK banks is getting even more difficult, and many of the banks and building societies in the UK are set to cut their lending level even more than they have over the past year, since the onset of the global credit crunch. This data comes from a report from the Bank of England. The report also claims that the fall in new mortgages over the past three months had been bigger than expected.
The quarterly credit conditions survey from the Bank of England showed that lending levels amongst lenders in the UK had already fallen hugely since the onset of the global credit crunch.
The central bank has also been surveying banks about their predictions for the final three months of this year with regards to mortgage lending levels. The central bank was told that most lenders are looking to tighten their belts even further when it comes to new lending.
The Bank of England report said: “Lenders reported that the changing economic outlook, their expectations for the housing market, and changes in their appetite for risk had contributed to the decline in credit availability.”
Following the release of the report one economist stated: “This is precisely what we would have expected, it reinforces the fact the housing market still has a lot further to weaken yet.”
Previously, we saw the Bank of England, along with five other global central banks take the unprecedented move of cutting 0.5% off their base rates in order to try and encourage lending between banks and increase liquidity amongst lenders to try and improve lending levels.
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