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Lenders expect to boost mortgage supply between now and May

Vicky Shaw, PA Personal Finance Correspondent
·2-min read

Lenders expect to boost the supply of mortgages between now and the end of May, a Bank of England survey has found.

Demand for loans, for both house purchase and re-mortgaging, is also predicted to jump during the period, according to the Bank’s credit conditions survey.

Banks are preparing to unveil details of new 5% deposit mortgage deals in the coming days, under a new Government-backed scheme.

Many low-deposit mortgages vanished early on in the coronavirus pandemic, amid concerns about the wider economy.

But more recently some new low-deposit deals have started to appear.

A stamp duty holiday, which was due to end in March, was also recently extended.

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (Rics), said: “The historic nature of these latest numbers show activity in pause-mode at the beginning of 2021 when lockdown restrictions were reintroduced and the prospect of meeting the stamp duty holiday deadline for many were receding.”

He added: “Lending prospects for the next quarter are much rosier and likely to demonstrate a sharp rebound in activity.”

The Bank of England’s credit conditions survey represents the views of lenders and not necessarily the Bank itself.

It asks banks and building societies about credit conditions over the previous three months as well as their expectations for the next few months.

The latest survey was carried out in March.

Lenders also anticipate that the availability of non-mortgage credit to households will increase in the next three months. Demand for borrowing, including on credit cards, is expected to rise.

Zero-interest periods on credit cards are also expected to lengthen, both for balance transfers and on new purchases.

The availability of credit to businesses is also expected to rise slightly.

Demand for corporate lending is also anticipated to increase across all business sizes in the next few months.