The BoE has published its credit conditions survey for Q1 2025.
The quarterly survey covers secured and unsecured lending to households, and lending to non-financial corporations, non-bank financial firms and small businesses. It was conducted between 3 and 21 March 2025.
Supply
- The availability of secured and unsecured credit to households slightly increased, and are both expected to continue increasing in Q2.
- Credit availability for SMEs increased, but remained unchanged for large businesses. Overall corporate credit availability is expected to remain unchanged in Q2.
Demand
- Demand for secured lending for houses purchases increased, but is expected to remain unchanged in Q2. Demand for remortgaging also increased, and is expected to continue into Q2.
- Overall demand for unsecured lending increased in Q1 and expected to continue into Q2.
- Demand for corporate lending from small businesses slightly increased, as did demand from medium and large businesses. Demand is expected to remained unchanged for SMEs in Q2, but increase slightly for large businesses.
Loan pricing
- Spreads on secured lending to households narrowed and are expected to remain unchanged in Q2.
- Unsecured lending spreads widened and are expected to widen further in Q2.
- Interest-free periods on credit cards for balance transfers and purchases increased, and are expected to increase again in Q2.
- Spreads on corporate lending to SMEs were unchanged, but narrowed for large businesses. This pattern is expected to continue in Q2.
Defaults
- Default rates on secured loans to households were unchanged and are expected to remain so in Q2, although losses given default increased and are expected to increase further.
- Default rates for unsecured lending decreased and are expected to remain unchanged in Q2.
- Credit card defaults decreased, while other loan defaults were unchanged. Credit card defaults are expected to remain unchanged, and other defaults are expected in decrease in Q2.
- Default rates on loans to corporates were unchanged for all business sizes. In Q2, they are expected to increase slightly for small businesses, and remain unchanged for medium and large businesses.
- Losses given default were unchanged for SMEs but slightly increased for large businesses.
The Q2 2025 credit conditions survey is to be published in early July.