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| Banks report increase in UK mortgage availability | Banks report increase in UK mortgage availability |
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| Banks' appetite for lending to individuals grew in the first three months of 2013, but the availability of loans to small and medium businesses remained restricted, according to the Bank of England's latest credit conditions survey. | Banks' appetite for lending to individuals grew in the first three months of 2013, but the availability of loans to small and medium businesses remained restricted, according to the Bank of England's latest credit conditions survey. |
| Lenders reported an increase in the overall availability of secured credit to households for the third consecutive quarter, citing attempts to increase their market share as the main reason for offering more loans. An increased appetite for risk, and a fall in the cost of providing mortgages, helped by the government's Funding for Lending scheme, also contributed. | Lenders reported an increase in the overall availability of secured credit to households for the third consecutive quarter, citing attempts to increase their market share as the main reason for offering more loans. An increased appetite for risk, and a fall in the cost of providing mortgages, helped by the government's Funding for Lending scheme, also contributed. |
| The rise in mortgage availability was slightly more marked among customers looking to borrow at least 75% of a property's value, and lenders said maximum loan-to-values and loan-to-income ratios had increased slightly over the quarter. At the same time, competition among lenders, and the access to cheap funds through Funding for Lending, pushed down interest rates. | The rise in mortgage availability was slightly more marked among customers looking to borrow at least 75% of a property's value, and lenders said maximum loan-to-values and loan-to-income ratios had increased slightly over the quarter. At the same time, competition among lenders, and the access to cheap funds through Funding for Lending, pushed down interest rates. |
| Looking ahead, lenders said they expected to make more home loans available to borrowers across all loan-to-value ratios as they continued to build market share. | Looking ahead, lenders said they expected to make more home loans available to borrowers across all loan-to-value ratios as they continued to build market share. |
| The government's Funding for Lending scheme, introduced in August 2012, has reduced costs for lenders by offering cheap funding to banks and building societies. It was designed to boost lending to householders and businesses, but the Bank's survey suggests that small and medium companies may still be struggling to raise funds. | The government's Funding for Lending scheme, introduced in August 2012, has reduced costs for lenders by offering cheap funding to banks and building societies. It was designed to boost lending to householders and businesses, but the Bank's survey suggests that small and medium companies may still be struggling to raise funds. |
| Lenders reported an increase in credit availability over the first quarter, but said the increase was confined to large companies and that the picture was likely to look similar through the rest of 2013. | Lenders reported an increase in credit availability over the first quarter, but said the increase was confined to large companies and that the picture was likely to look similar through the rest of 2013. |
| Demand for credit from small firms fell over the period, as did demand from medium firms. However, lenders said they expected both to pick up in the second quarter. | Demand for credit from small firms fell over the period, as did demand from medium firms. However, lenders said they expected both to pick up in the second quarter. |
| Howard Archer, chief UK economist at IHS Global Insight, said the survey "reinforces the impression that the Funding for Lending scheme is not having a major impact in lifting lending to corporates and it particularly heightens concern that smaller companies are still struggling to get capital". | Howard Archer, chief UK economist at IHS Global Insight, said the survey "reinforces the impression that the Funding for Lending scheme is not having a major impact in lifting lending to corporates and it particularly heightens concern that smaller companies are still struggling to get capital". |
| He added: "This is a particular concern as the survey indicates that there is expected to be a significant increase in demand for credit from all companies in the second quarter, including small ones. | He added: "This is a particular concern as the survey indicates that there is expected to be a significant increase in demand for credit from all companies in the second quarter, including small ones. |
| "The survey adds to the pressure on the Bank of England and the government to come up with further measures aimed at boosting bank lending to businesses, with the focus particularly on easing credit conditions for smaller companies." | "The survey adds to the pressure on the Bank of England and the government to come up with further measures aimed at boosting bank lending to businesses, with the focus particularly on easing credit conditions for smaller companies." |
| Mark Harris, chief executive of mortgage broker SPF Private Clients, said it was "encouraging" to see that lenders were increasing maximum loan-to-values and loan-to-income ratios. | Mark Harris, chief executive of mortgage broker SPF Private Clients, said it was "encouraging" to see that lenders were increasing maximum loan-to-values and loan-to-income ratios. |
| He added: "However, credit scoring remained as tight as ever, with the number of applications being approved falling slightly, suggesting that there should be room for further easing." | He added: "However, credit scoring remained as tight as ever, with the number of applications being approved falling slightly, suggesting that there should be room for further easing." |
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