Bank of England publishes 2024 Q3 Credit Conditions Survey

The Bank of England published the results of its 2024 Q3 Credit Conditions Survey on 10 October 2024¹. The quarterly survey of banks and building societies covers secured and unsecured lending to households and lending to businesses¹. Lenders were asked to report changes in the three months to end-August 2024 relative to March to May, and expected changes in the three months to end-November 2024 relative to June to August¹. The survey was conducted between 27 August and 13 September 2024¹.

On supply, lenders reported that the availability of secured credit to households increased in the three months to end-August 2024 and was expected to be unchanged over the next three months¹. Availability of unsecured credit to households slightly increased and was expected to increase¹. Overall availability of credit to the corporate sector was unchanged, with availability for small businesses unchanged and for medium-sized and large businesses slightly increased¹.

On demand, demand for secured lending for house purchase was unchanged in Q3 and was expected to increase in Q4, while demand for remortgaging decreased and was expected to increase¹. Overall demand for unsecured lending was unchanged and was expected to decrease slightly; within that, credit card demand was unchanged and expected to decrease, while other unsecured lending demand increased and was expected to increase¹. Corporate demand was unchanged for businesses of all sizes in Q3¹.

On pricing, overall spreads on secured lending to households slightly widened in Q3 and were expected to narrow in Q4, while unsecured lending spreads widened and were expected to widen¹. The length of interest-free periods on credit cards for balance transfers and for purchases increased in Q3 and was expected to increase slightly in Q4¹. On defaults, default rates on secured loans to households increased in Q3 and were expected to increase again in Q4, while default rates for total unsecured lending slightly decreased and were expected to be unchanged¹.

The Bank sets out how the results are described:

Why it matters for households

The survey reports lenders' own responses and the Bank says the results do not necessarily reflect its views on credit conditions¹. The figures describe the direction of change rather than the cost of borrowing, and the survey does not report actual interest rates charged to households. For mortgage borrowers, lenders reported that secured credit availability rose in the three months to end-August 2024 and that spreads on secured lending slightly widened, with spreads expected to narrow in the next three months¹. Default rates on secured loans increased and were expected to rise again¹. For users of unsecured credit such as credit cards and personal loans, availability slightly increased, spreads widened and were expected to widen further, while the interest-free periods offered on credit cards lengthened¹. The survey was conducted between 27 August and 13 September 2024, and the Bank notes that any impact on lenders' expectations from developments occurring within that period may not be fully captured, and any impact from more recent developments will not be captured at all¹.

What happens next

The 2024 Q4 Credit Conditions Survey will be published on 16 January 2025¹.