The latest Bank of England Credit Conditions Survey asked lenders for their predictions over the next three months.
Lenders put the predicted drop in supply down to "a changing appetite for risk".
Lenders also reported that demand for prime lending increased and demand for buy-to-let lending decreased significantly in Q2.
They expect total demand for secured lending for house purchase to increase in Q3, driven by an increase in buy-to-let lending and a slight increase in prime lending. Demand for remortgaging was reported to have decreased slightly in Q2, but was expected to be unchanged in Q3.
Respondents also reported that the availability of unsecured credit to households had decreased in Q2, and expected a further decrease in Q3.
This comes as scoring criteria for granting both credit card and other unsecured loans tightened again in Q2, with lenders expecting further tightening in Q3.
