Mortgage availability will worsen over the next three months, according to the Bank of England.
A quarter one survey by the Bank shows lenders expect a larger reduction in available secured credit than in the three months to the middle of March.
Providers expect to tighten credit scoring and reduce maximum loan-to-value (LTV) ratios as they did previously following a fall in risk appetite and increased concerns about the macro-economy and housing market.
The Bank assigned each lender a score based on its survey response. Positive balances indicate lenders expected demand, credit availability or defaults to become higher than over the previous or current three-month period, or that the terms and conditions on which they provided credit became cheaper or looser respectively.
However, lenders reported a balance of -43 for the next few months compared to a balance of -31 over the previous period.
The survey follows figures from the Bank of England yesterday, which show mortgage lending has slumped to its lowest level for 13 years.
Earlier this week provider First Direct closed its doors to new mortgage customers as applications rose after competitors increased costs. Lehman Brothers has shut down its UK mortgage ranges to new business while the Co-op announced its whole range of 2-year fixed rate products will no longer be available from close of play today.
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