Great news for homebuyers as mortgage availability increases
Mortgage availability has significantly increased over the past three months, according to the Bank of England this week.
Figures suggest the last three months enjoyed the largest increase in secured lending to household since the Credit Conditions Survey launched in 2007, and anticipation remains high for the remainder of the year with the Funding for Lending Scheme expected to contribute to this increase further.
The Funding for Lending Scheme is designed to stimulate the economy by making cheaper loans available. Lenders who sign up to the initiative can borrow 5 per cent of their loan books immediately. This extended funding pool can be passed on to clients.
Thirteen banks and building societies, which account for 73 per cent (£1.2trillion) of the market and includes Santander, Lloyds Banking Group, RBS Group and Virgin Money, have already signed up to the scheme. HSBC is the only one of the top six lenders not to embrace the scheme stating it does not need any additional funding.
While the scheme is a positive step forward it is not without its critics, many of whom highlight the bulk of these loans are available to homebuyers and movers who are already ‘spoilt for choice’. Borrowers, including first time buyers, in need of loans with a loan to value ratio in excess of 75 per cent are still fishing from a rather dry pool.
Content correct at time of publication