UK lenders report increased secured credit availability in Q1

Investing.com -- UK banks and building societies reported that secured credit availability to households increased in the three months to end-February 2026, according to the Bank of England’s Credit Conditions Survey for Q1 2026 published Thursday.

Lenders expect this availability to increase further in the three months to end-May 2026.

The survey, conducted between February 23 and March 13, showed unsecured credit availability to households remained unchanged in Q1, though lenders anticipate an increase in Q2. Overall corporate credit availability was unchanged in Q1, but lenders reported increases for small, medium and large businesses individually during the same period.

Demand for secured lending for house purchases was unchanged in Q1, with lenders expecting an increase in Q2. Demand for remortgaging increased in Q1 and is expected to rise again in Q2. Overall unsecured lending demand remained unchanged in Q1 and is expected to stay flat in Q2.

For corporate lending, demand from small and large businesses increased slightly in Q1, while medium-sized business demand was unchanged. In Q2, lenders expect demand from small businesses to increase slightly, medium-sized business demand to decrease slightly, and large business demand to remain unchanged.

Default rates on secured household loans increased slightly in Q1, though lenders expect a slight decrease in Q2. Default rates for total unsecured lending increased in Q1 and are expected to increase slightly in Q2. Corporate default rates remained unchanged across all business sizes in Q1 and are expected to stay flat in Q2.

Spreads on secured household lending narrowed in Q1 and are expected to remain unchanged in Q2. Unsecured lending spreads widened in Q1 and are expected to widen further in Q2.