A survey conducted by the Bank of England has revealed today that mortgage lenders are expecting to increase the range of products on offer throughout 2012. The poll of banks, brokers and mutuals found that although most believed the difficult economic conditions in the UK were set to continue, the majority said that they wished to launch a wider range of more innovative deals. The majority of these would largely be aimed at first-time buyers with smaller deposits. Many first-time buyers have been trapped in the private rented sector due to the paucity of mortgages aimed at them of late, and last autumn represented the lowest proportion of the UK housing market since 2007. However, the downside of the increased availability of mortgage products is that the criteria for approval will be made tougher in the first quarter of 2012, causing the number of mortgage approvals to drop between January and March. The Bank’s quarterly lending report said that the reason for this move was that many lenders had downgraded their predictions for the average UK household’s disposable income as living costs continue to rise and wages stagnate, not to mention rising unemployment. The report also noted that in the final quarter of 2011 there was a slight fall in the number of people defaulting on their mortgages, although previous reports believed that there would be no shift in this figure. During this quarter there was also a fall in demand for unsecured lending again confounding predictions that demand would increase. Demand for credit card lending also fell slightly, alongside a “sharp contraction” in demand for other forms of unsecured credit.