Banks and building societies reported that demand for mortgages for house purchase increased in the second quarter of this year, but is expected to decrease in the next few months, according to the Credit Conditions Survey.
Demand for remortgaging increased in the second quarter, and is expected to decrease in the next few months.
The Bank carries out the survey each quarter as part of its role in maintaining financial stability.
In the survey for the second quarter of this year, lenders were asked to report changes in the three months to the end of May, relative to the previous three-month period between December and February.
They were also asked about their expectations for the three months to the end of August.
The survey was carried out between May 26 and June 12 and so any impact from more recent developments will not be captured.
Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “More stable levels of secured debt, such as mortgages, generally indicate there has been no sudden or harsh shift in consumer confidence.”
Karim Haji, global and UK head of financial services at KPMG, said: “Secured lending demand was primarily driven by borrowers racing to lock in rates, capitalising on cuts to fixed-rate mortgage products by the major lenders.
“Some may have also wanted to secure deals ahead of any future inflation spikes.”
He added: “While major lenders have cut mortgage rates and oil prices have eased, the outlook for (the third quarter) remains volatile.
“Stubborn inflation, lingering energy cost pressures and low consumer confidence linked to cost of living and job security concerns will continue to fuel economic and financial anxiety for many.”
The survey also indicated that the availability of non-mortgage credit to households is expected to decrease in the next few months.
Demand for credit card lending slightly decreased in the second quarter, and is expected to be unchanged in the third quarter.
Lenders also said the length of interest-free periods on credit cards for balance transfers decreased in the second quarter, and this is expected to be unchanged in the third quarter.
The length of interest-free periods on new credit cards for purchases decreased in the second quarter, and this is expected to increase slightly in the third quarter.
Lenders reported that demand for corporate lending in the second quarter decreased for small and medium businesses, and was unchanged for big businesses.
Demand for corporate lending in the third quarter is expected to be unchanged for small, medium and large businesses.
Lenders said the overall availability of credit to the corporate sector was unchanged in the second quarter.
When broken down by size of business, lenders reported that credit availability slightly decreased for small and medium businesses, and was unchanged for big businesses in the second quarter.
Overall availability was expected to be unchanged in the third quarter.