Banks To Offer More Loans During Next Quarter
Anybody who has applied for a personal loan over the past twelve months or so is likely to know exactly how difficult it has become to obtain the funding they need from their local bank or building society.
Since the beginning of the credit crunch in 2007, banks have continued to tighten their lending criteria, due to worries over increased risk of arrears and defaults, making it almost impossible for someone to get the cheap loan they require, even if they have a perfect credit rating and good security for the loan.
Since Christmas last year, up to the end of March this year, the availability of personal secured loans had diminished even further, according to the latest figures from the Bank of England, as the majority of lenders continued to have growing concerns over the risk levels associated with lending and the possibility of further falls in house prices. According to the latest figures from the British Bankers Association (BBA) new lending on home owner loans reached an eight year low in February this year, of just £9.2 billion.
However, it now looks as though things may be starting to improve as a number of banks have announced that they will be increasing their level of lending on secured loans over the next three months, both for personal loans and business loans.
A spokesman for the Bank of England said that the “Economic outlook was no longer expected to be a factor bearing down on credit availability. Improvements in the cost and availability of funds were expected to support increased availability over the next three months.” No figures have been given for just how much extra funding will be available for new loans, or how long this is likely to last, but any improvement has to be seen as a step in the right direction.
