Availability of secured loans declines

3 October 2008

Consumers seeking secured loans may not welcome figures published by the Bank of England (BoE), which reveal that the availability of credit for such loans has tightened.

According to the organisation, lenders reported that they had reduced the availability of secured credit to households in the three-month period ending in September by more than they had anticipated they would when questioned in the previous quarter.

Expectations of falling house prices and concerns over the general economic outlook were cited as factors contributing to this trend.

Meanwhile, the amount of money being handed to consumers in the form of unsecured loans also declined over the three months ending in September.

The BoE revealed that the unsecured credit available to people reduced over the quarter in line with expectations, while lenders anticipate similar decreases over the next three months.

Recently, the Bank released figures which indicated that the growth rate in lending to individuals in the UK slowed in August to 6.2 per cent.

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