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Appetite for lending returning

Appetite for lending returning

Category: Mortgages

Updated: 20/05/2009
First Published: 20/05/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A number of businesses reported a small rise in the appetite for lending by major British banks', the Bank of England has revealed.

It did however note that the sense of improvement had been by no means universal, while many contacts still reported high costs of finance, according to the agent's summary of business conditions for May.

Agents had also continued to hear of sharp increases in spreads and fees on the renewal or extension of existing credit facilities, while some also suggested that charges applied to undrawn facilities had been increased.

Meanwhile, the availability and cost of trade credit insurance continued to be cited frequently as a significant burden.

Many suppliers said they had responded to loss of cover by taking counterparty risk onto their own balance sheets, or demanding upfront payments, rather than by refusing orders.

The summary also found there was evidence of increasing buyer enthusiasm leading to a pickup in sales, while it was also noted that the availability of mortgage finance had improved.

Consumer demand has also registered a small rise, albeit it in single areas like domestic holidaying, food and personal financial services, rather than across the board.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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