Gavekal Capital: A Look at the Dive in Availability of Credit to Households in the U.K.

Tuesday, October 7, 2014

A Look at the Dive in Availability of Credit to Households in the U.K.

The availability of credit for U.K. households over the last three months fell the most since the global financial crisis and marks the first contraction after eight consecutive quarters of expansion:

(note: in each of these charts, the blue line represents the last three months' actual data while the red line is a forward-looking assessment of credit conditions.)

Conditions tightened for all borrowers, regardless of loan-to-value criteria:

LTV below 75%

LTV above 75%

Credit scoring criteria were tightened in the last quarter:

Consumer demand for mortgages took a dive:

And mortgage approvals suffered:

On the bright side, lenders anticipate a pick-up in availability and approvals next quarter.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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