Mortgage supply and demand (Bank Lending Survey)

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This topic shows trends in demand for residential mortgage loans based on a survey conducted among Dutch banks. It also shows tightening or easing of credit underwriting standards, which are internal guidelines that banks use to set the terms for issuing a mortgage loan. The survey is conducted annually in January, April, July and October.

What is the Bank Lending Survey?

The Bank Lending Survey is a quarterly survey which asks a number of Dutch-based banks (accounting for more than 80% of total Dutch banking assets) about their perceptions of credit developments. This includes developments in the mortgage market.

The banks’ responses only reflect the direction of developments and expectations, but not their exact extent. The developments are expressed as a net percentage indicating the difference between the percentage of banks providing a positive answer and the percentage of banks providing a negative answer.

Changes in demand

Demand for residential mortgages depends on several factors, including income trends, unemployment, the housing market outlook, consumer confidence, competition among mortgage lenders, the level of interest rates and the prevailing tax regime.

A value above the zero line in the chart below indicates that, on balance, banks perceive an increase in demand. At a value below the zero line, a majority of banks see a decline in demand.

Underwriting standards

The credit underwriting standards that banks use depend on several factors, including competitive pressures, risk perception, risk tolerance and funding costs. A value above the zero line indicates that there are more banks that have tightened their credit underwriting standards in the relevant period than those that have eased them. With a value below the zero line, the reverse applies. Credit underwriting standards relate, for example, to the type of loan and the characteristics of the collateral.

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