The central bank's latest credit conditions survey found that availability of secured credit to households had increased in recent months, while unsecured credit had fallen.

A spokesperson for the bank said: "Demand for secured lending for house purchase had risen over the past three months, while demand for household unsecured credit and corporate credit had weakened.  Default rates had remained stable on secured lending to households and had fallen unexpectedly on unsecured lending."

The survey found that the increase in secured credit availability was greater for borrowers with loan to value (LTV) ratios above 75 per cent, thanks in part to the improved outlook for house prices.

The spokespeson added: "Changes in the economic outlook more generally had also contributed to increased credit availability over the quarter, having borne down on credit conditions since the beginning of 2008."

In addition, a net balance of mortgage lenders reported that an improvement in the cost and availability of funding had contributed to the increase in credit availability.

A number of lender respondents to the survey said they expected a further increase in secured credit availability in the first quarter of 2010, however, this is tempered by the prospect of a rise in default rates and the impact of further unemployment.

The spokesperson said: "Household demand for secured lending for house purchase was reported to have increased in the three months to early December, driven by increased demand for prime lending.  This was the third consecutive quarter in which demand for house purchase had increased contrary to lenders' expectations.  In contrast, demand for remortgaging was reported to have fallen in the fourth quarter of 2009. Lenders expected diminished demand for buy-to-let mortgages over the next three months but broadly stable demand for all other types of household secured lending."

In the unsecured lending arena, a number of lenders reported a 'diminished appetite for risk and market share', as a cause of reduced availability, fuelled by a lower demand for unsecured credit.