Demand for mortgages for homebuying in the UK tailed off in the last three months of 2021 and will continue to cool in the next three months, even as credit conditions for borrowers are expected to remain loose, according to a closely watched survey.
In the wake of the end of a stamp duty holiday in England and Northern Ireland, mortgage lending declined in the last quarter of 2021, according to the quarterly survey of credit conditions from the Bank of England. Polled as fears of interest rate increases are rising, lenders predicted it would retreat further over the current quarter.
But mortgages are also expected to become more widely available, as lenders anticipate an easing of conditions for borrowers with smaller deposits. In the survey, which measures the net balance of opinion among respondents, the number of lenders predicting credit conditions would loosen over the next three months exceeded those saying it would tighten by 15 per cent.
Last year’s housing market was characterised by a sharp rise in the number of sales, fuelled by the stamp duty holiday and…