BoE says UK banks report big rise in demand for personal loans

LONDON (Reuters) - British banks saw a notable rise in demand for personal loans and other unsecured credit in late 2015 which was expected to remain strong in early 2016, the Bank of England said.

The BoE's Credit Conditions Survey said banks were providing more unsecured lending to households as their appetite for risk grew.

Bank of England Governor Mark Carney said this week that Britain's economic recovery was not reliant on growing debt levels among households.

"The increase in unsecured credit availability appeared particularly apparent in other unsecured lending, such as personal loans, where credit scoring criteria were reported to have loosened," the BoE said as it released its quarterly survey on Friday.

It also said banks had reported a slight increase in demand for mortgages in the fourth quarter of last year and it was likely to rise in the first quarter of this year.

Demand for buy-to-let (BTL) lending increased significantly in the fourth quarter, the BoE said.

The BoE is seeking powers to limit the size of BTL mortgages in order to reduce risky lending while Britain's finance minister George Osborne has said he will charge more tax on BTL investments.

(Reporting by William Schomberg; editing by Kate Holton)