The Bank of England has said that the number of defaults of home and business loans has fallen unexpectedly in the second quarter of the year.
The recent drop in loan defaults follows on from the trend for home loans that was present in 2009.
However, according to the Bank’s Credit Conditions Survey, the default rate is expected to remain at the current level in the third quarter of 2010, rather than drop again.
Lenders responded to the news by warning that the rate of loan defaults could start rising if the economy took another turn for the worst.
As well as a reduction in loan defaults the Credit Conditions survey also found that the number of mortgages available to buyers had also risen in the second quarter, but this is predicted to fall within the coming months.
The number of people wanting to remortgage their home rose for the first time since 2008 but the demand for new home loans also dropped slightly.
Remortgaging levels have been low since the recession as people stick to variable mortgage rates but now more competitive rates are available the number of people looking to remortgage is on the rise again.
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