The Bank of England has revealed that lenders reported demand for secured lending for house purchase increased in the third quarter of this year, but demand for secured lending for remortgaging decreased over the same period.
Demand for secured lending for house purchase was expected to remain unchanged in Q4, but demand for secured lending for remortgaging was expected to increase slightly.
In addition, lenders reported that overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — widened in Q3, and were expected to widen further in Q4.Lemder
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Borrowers who have found it harder to get a mortgage will not be surprised to hear that lenders tightened criteria in the third quarter and expect to tighten further in the run-up to the end of the year.
“Concerns about the impact of the pandemic on earnings and what will happen to property prices, particularly for those borrowing at high loan-to-values, is behind this growing caution.
“Demand for mortgages for new purchases rose but remortgaging dropped off. As we move into the final quarter of the year, lenders expect demand for new mortgages to be consistent, while remortgaging picks up.
“Mortgage pricing is on the rise, a trend expected to continue over the course of the rest of the year. With base rate likely to remain where it is, or even fall further, and Swaps continuing to bump along at low levels, lenders are taking the opportunity to improve their margins and profitability.”