The 2018 Q4 survey was conducted between 19 November and 7 December 2018.
Supply
- Lenders reported that the availability of secured credit to households had decreased in the three months to end-November 2018 (Q4) and was expected to increase slightly over the next three months to end-February 2019 (Q1).
- The availability of unsecured credit to households was reported to have decreased in Q4 and was expected to decrease slightly in Q1 (Chart 1). Credit scoring criteria for total unsecured loan applications were reported to have tightened slightly in Q4, although the proportion of applications approved was unchanged.
- The overall availability of credit to the corporate sector was reported to have been unchanged in Q4. Within this, the availability of credit provided to medium businesses was reported to have fallen slightly in Q4, and was unchanged for small and large businesses. The overall availability of credit to the corporate sector was expected to remain unchanged in Q1.
Demand
- Lenders reported that demand for secured lending for house purchase decreased significantly in Q4, and was expected to decrease further in Q1. However, demand for secured lending for remortgaging increased slightly in Q4, but demand was expected to decrease slightly in Q1 (Chart 2).
- Overall demand for unsecured lending increased significantly again in Q4; this was solely driven by a significant increase in demand for credit card lending. However, lenders expected a significant decrease in the demand for credit card lending in Q1, with demand for other unsecured lending expected to be unchanged (Chart 3).
- Lenders reported a decrease in demand for corporate lending from small businesses in Q4, and expected demand to decrease slightly in Q1 (Chart 4). For medium PNFCs, demand for lending was reported to have increased slightly but was expected to decrease in the next quarter. Demand for corporate lending from large PNFCs was reported to have decreased in Q4 and was expected to decrease significantly in 2019 Q1.
Loan pricing
- Overall spreads on secured lending to households — relative to Bank Rate or the appropriate swap rate — were reported to have narrowed significantly in 2018 Q4 and were expected to narrow further in Q1 (Chart 5).
- Lenders reported that overall unsecured lending spreads narrowed slightly in Q4. Overall unsecured lending spreads were expected to remain unchanged in Q1. The length of interest-free periods for balance transfers and new purchases on new credit card lending both decreased significantly in Q4.
- Spreads on lending to businesses of all sizes were unchanged in Q4, and were expected to remain unchanged over the next three months.
Defaults
- Lenders reported that default rates on secured loans to households was unchanged in Q4, and expected these to decrease in Q1. Losses given default on secured loans were unchanged in Q4, and were expected to increase slightly over 2019 Q1.
- Default rates increased for total unsecured lending in Q4. This was driven by an increase in default rates on credit card loans (Chart 6). Lenders expected default rates for total unsecured lending to remain unchanged in Q1.
- Lenders reported that default rates on loans to corporates increased for small businesses in Q4, and increased slightly for medium-sized businesses while remaining unchanged for large businesses. However, losses given defaults were unchanged. Default rates were expected to be unchanged for small and large businesses in Q1, but were expected to increase for medium-sized businesses.
Credit Conditions Survey - 2018 Q4
Results for annex 1, 2 and 3