British lenders tightened lending further in the last quarter of 2008, a survey released on Friday has revealed.
According to the Bank of England’s Q4 Credit Conditions Survey, a net balance of lenders, surveyed between 24 November and 15 December, reduced their availability of secured loans to households.
The result of this tightening was a larger than expected decline in loan approval rates and lower maximum loan-to-value ratios.
These results coincide with reports from the BBC that finance minister Alistair Darling is working on new measures to bolster the country’s financial sector, including a possible gathering of banks’ toxic assets into one entity.
Further declines in credit availability are also expected in the next three months, the survey found.