Eurozone demand for home loans has turned positive for the first time since early 2006, while businesses are seeing a 'turning point' in the increasingly tough conditions imposed on bank loans, according to a European Central Bank report.

Consumers became markedly less pessimistic about housing market prospects in the second quarter of this year, and the pace at which credit standards were tightened on mortgages fell again, the ECB’s latest bank lending survey showed yesterday. Meanwhile, credit standards for companies were tightened at a much slower pace than in the previous three quarters, said the closely watched report.

Official concern about the health of eurozone credit markets has heightened in recent weeks, but the ECB survey added to the evidence that government and central bank emergency policies to counter the severe recession are beginning to feed through into the 16-country eurozone economy.

Financial Times