Only 50% of Lenders Expect Defaults to Increase in the 3rd Quarter!
Posted on 3 July 2008 by
The Bank of England's (BofE’s) second quarterly Credit Conditions Survey was conducted between 27 May and 18 June and in one question lenders were asked to report their actual experience over the previous three months and their prediction for the following quarter on the level of defaults on mortgage loans.
47.3% of lenders reported default rates increased in the second quarter, sharply higher than the 28.6% reporting an increase in the previous quarter. This 47.3% compares with only 40.1% of lenders in the same survey 3 months ago only expecting default rates to increase in the second quarter
In the new survey a net balance of only 50.4% of lenders said they expected default rates to increase over the coming three months. Making predictions about the property market at the moment is fraught with more difficulties than usual at present but one prediction I will confidently make is that this 50.4% figure will be significantly exceeded when the BofE’s next quarterly survey reports the actual figures.
I have heard of borrowers choosing not to recognise a problem and putting their heads in the sand when they run into financial difficulty, but lenders doing the same!!!!!
Categories: Bank of England, Mortgages
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