FLS scheme makes buying a house easier

Published: 24/04/2013

The number of people buying a house or remortgaging has increased by a quarter during the first three months of the year, according to March’s National Mortgage Index from the Mortgage Advice Bureau.

House purchases in January, February and March were up 26% and remortgages 22% compared to the previous three months (October, November and December 2012). There was also an annual increase of 13% and 19% for purchases and remortgages respectively.

The improvement is believed to be, in large part, down to the Funding for Lending Scheme (FLS).

Designed to stimulate the economy, the FLS allows lenders to borrow 5 per cent of their loan books immediately. As a result these extended funds are now being passed on to clients.

There are currently 20% more products available to customers looking to buying a house or remortgage than there were prior to the launch of the scheme in August 2012.

Lynne McCaffrey is Head of Property at Goldsmith Williams:

“There is no denying the positive effect the Funding for Lending Scheme is having on the mortgage market. Its’ monetary booster has re-injected competition in a previously stagnated market.

“That said it has not bore the same fruit for first time buyers. Lenders appear to be using the funds from the scheme to offer the most competitive rates and best deals to customers with the luxury of a higher deposit.

“Hopefully Help to Buy will be the initiative to solve the first time buyer equation. Then the market should really start to resemble its former self.”

Content correct at time of publication