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BoE Credit Conditions Survey: Increased demand in Q1 "was likely boosted by the stamp duty deadline"

ended 17. April 2025

The Bank of England has this morning published its Q1 quarterly credit conditions survey. Key points below. Newspage asked brokers for their views, which will appear below until 10:30.

  • Lenders reported that the availability of secured credit to households slightly increased in the three months to end-February 2025 (Q1) and was expected to increase over the next three months to end-May 2025 (Q2) (Chart 1).
  • Lenders reported that demand for secured lending for house purchase increased in Q1, but was expected to be unchanged in Q2. Demand for secured lending for remortgaging increased in Q1, and was expected to increase in Q2 (Chart 4).
  • Lenders reported that overall spreads on secured lending to households – relative to Bank Rate or the appropriate swap rate – narrowed in Q1, and were expected to be unchanged in Q2.
  • Lenders reported that default rates on secured loans to households were unchanged in Q1, and were expected to be unchanged in Q2 (Chart 7). Losses given default on secured loans increased in Q1, and were expected to increase in Q2.

3 responses from the Newspage community

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Editor
Ben Perks
Managing Director at Orchard Financial Advisers
It's encouraging to see that demand for secured lending for house purchases increased in the three months to the end of February. This was likely boosted by the stamp duty deadline at the beginning of the period, but by February the chances of beating the deadline were much reduced so this shows demand has kept steady. With demand on the way up and interest rates on the way down, it bodes well for the mortgage market in the second quarter. A number of major lenders have reduced rates over the past week or so and more cuts are expected in the days ahead so overall this is positive data.
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Editor
Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
The fact that demand picked up in the first quarter almost certainly reflects the looming stamp duty deadline, which really got the market moving. With more lenders now trimming their rates, and the Bank of England expected to cut in May, especially after the lower than expected inflation data, the second quarter could now be stronger than the banks were originally expecting. There's a growing optimism around the property market at present.
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Editor
Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
These figures should give us cautious optimism despite economic headwinds and the recent changes to Stamp Duty. The deadline for the latter certainly helped fuel the market, but it remains to be seen what effect the changes will have for the rest of the year. One area of concern is the expected increase in losses given default. It's a reminder that some households are still experiencing financial pressures despite the encouraging outlook. We can only hope these issues are not exacerbated by our government or the increasingly erratic one across the pond.