Mortgage defaults to rise in coming months

Landlord Expert
By Landlord Expert July 4, 2011 09:22

Mortgage lenders expect the number of people defaulting on their home loans to rise in the coming months, according to a new survey.

The Bank of England's quarterly study of credit conditions revealed the default rate on secured loans was unchanged in the second quarter of 2011, but banks and building societies expect an increase in the third quarter.

Default rates on unsecured loans fell for a seventh consecutive three-month period, the analysis added, but this rate is also predicted to rise.

Meanwhile, the number of people failing to make payments on credit cards increased and is expected to continue rising in the coming three months.

On the supply side, the availability of mortgages remained flat between April and June, a trend that banks and building societies believe will carry on in the coming three months.

The analysis went on to show that the availability of unsecured credit is expected to increase in the third quarter of 2011, following a period of stagnation in the second quarter.

Demand for mortgages increased, but much of this was driven by landlords looking to purchase buy-to-let properties, the study added.

Vicky Redwood, senior UK economist at Capital Economics, told the Telegraph the report paints a rather bleak picture for the UK mortgage market.

"There was little in the Bank of England's latest credit conditions survey to suggest that bank lending is set to pick up any time soon," she said.

Landlord Expert
By Landlord Expert July 4, 2011 09:22

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