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BoE Bank Survey Shows Increase in Mortgages and Business Loans

British lenders expect a significant increase in the availability of mortgages and a better supply of business loans in the first quarter of 2014, a Bank of England survey showed on Wednesday.

The central bank’s quarterly Credit Conditions Survey said banks reported that demand for secured lending by households – essentially mortgages – rose at its fastest pace in the fourth quarter since the survey began in 2007.

“Lenders expected the availability of secured credit to significantly increase in 2014 Q1, including for those borrowers with a LTV (Loan to Value) ratio above 75 percent and 90 percent,” the BoE said.

The government launched a mortgage guarantee scheme under its Help to Buy plan in October, helping home-buyers to put down a deposit of as little as 5 percent.

The impact of the latest phase of the Help to Buy program has so far been modest, leading to an extra 6,000 mortgage applications between October and December, according to previously released numbers.

That compares with overall mortgage approvals that are running at about 70,000 a month.

The BoE survey published on Wednesday found lenders expected spreads on mortgage rates to fall further but only slightly over the next three months.

via Reuters [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza