The Bank of England's Credit Conditions Survey for the first quarter of 2026, published Thursday, records an uptick in availability of secured credit to households in the three months to end-February 2026. Lenders participating in the survey anticipate that availability will rise again in the following three-month period to end-May 2026.
By contrast, availability of unsecured credit to households was reported as unchanged over the same quarter, with lenders expecting an increase in the second quarter. On the corporate side, aggregate credit availability was unchanged in Q1, although participating lenders separately reported increases in availability for small, medium and large businesses during the quarter.
Demand patterns varied by product. Demand for secured lending tied to house purchases was unchanged in Q1, with expectations that it will increase in Q2. Remortgaging demand rose in Q1 and is expected to increase again in the next quarter. Overall demand for unsecured lending was unchanged in Q1 and is expected to remain flat in Q2.
Turning to corporate lending, lenders reported a slight increase in demand from small and large businesses in Q1, while demand from medium-sized firms was unchanged. Looking ahead to Q2, lenders expect demand from small businesses to increase slightly, demand from medium-sized businesses to decrease slightly, and demand from large businesses to remain unchanged.
The survey also captured lenders' views on credit performance. Default rates on secured household loans rose slightly in Q1 but are expected to decline slightly in Q2. For total unsecured lending, default rates increased in Q1 and are expected to increase slightly in Q2. Corporate default rates were reported as unchanged across small, medium and large firms in Q1 and are expected to remain flat in Q2.
Pricing dynamics showed spreads on secured household lending narrowed in Q1 and are expected to be unchanged in Q2. Conversely, spreads on unsecured lending widened in Q1 and lenders expect them to widen further in Q2.
The survey was conducted between February 23 and March 13, and its findings reflect lender sentiment and reported experience over the three months to end-February 2026 as well as expectations for the three months to end-May 2026.