April 12, 2018 / 8:40 AM / in 8 months

UK lenders expect rebound in demand for mortgage lending in coming months: BoE

FILE PHOTO: A bus passes the Bank of England in London, Britain, April 9, 2018. REUTERS/Hannah McKay/File Photo

LONDON (Reuters) - British lenders expect to see demand for mortgage lending rebound over the next few months after a sharp drop in the first quarter of 2018, a Bank of England survey showed on Thursday.

The BoE, which has been urging banks to avoid risks in their lending to households, also reported the sharpest drop in the availability of unsecured lending to consumers during the first quarter since records began in 2007.

Britain’s housing market has been struggling for momentum over the last year, in part reflecting a squeeze on consumers from rising inflation since the Brexit vote in 2016 and weak wage growth.

A closely-watched gauge of British house prices held at a five-year low last month, reflecting soft consumer demand at a time when the Bank of England looks set to raise interest rates, property valuers said earlier on Thursday.

Lenders in the BoE survey said they expected to keep the availability of mortgages, lending to consumers and business broadly unchanged over the next three months.

The BoE conducted its survey between Feb. 19 and March 9.

Reporting by Andy Bruce, editing by Kate Holton

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