Mortgage Availability to Remain Restricted in 2012 – BoE

According to the latest Credit Conditions Survey by the Bank of England, mortgage lending in the first quarter of 2012 will remain restricted.

Many UK lenders have revised their expectations for the household income on potential borrowers and said that they will make the lending criteria stricter. This, in its turn, will result in a decrease in mortgage approvals.

The Bank of England said that the demand for home loans might also fall as it has already been constrained in the fourth quarter of 2011. Many UK borrowers simply were unable to put down the deposits required by lenders.

Commenting on the findings, specialists at the Bank of England, said: "factors such as the economic outlook and tighter wholesale funding conditions were expected to impact negatively on credit availability... Developments in the euro area and their impact on banks’ funding conditions would be a key determinant of credit availability over the coming quarter."

The detailed Credit Conditions Survey is available on the official website of the Bank of England.