Mortgage approvals expected to fall
There has been a fall in the proportion of mortgage loans being approved already this year as lenders have tightened their credit scoring criteria, the quarterly Credit Conditions Survey found.
However, overall mortgage availability is expected to fall slightly in the next three months, affecting borrowers across the board.
The report follows a wave of lenders announcing increased mortgage costs, blaming the increased cost of funding a mortgage and the weak economy.
It said expectations for house prices, which analysts are predicting will move sideways or fall, may also decrease the availability of credit.
Paul Diggle, property economist at Capital Economics said: "Most lenders expect the upward pressure on mortgage interest rates to be maintained and anticipate reducing the availability of mortgages in the next three months.
"All in all, with little or no prospect of a material loosening in credit conditions on the cards, and housing market demand likely to remain weak, the downwards pressure on house prices is set to be maintained this year."
Lenders also expect the overall availability of unsecured credit, which includes personal loans, overdrafts and credit cards, to decrease in the next three months, the first time they have made this prediction since autumn 2009.
Credit card loan approvals are expected to fall following a decrease in demand for this type of lending, although credit scoring criteria is predicted to remain broadly unchanged.
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