Lenders need to utilise FLS to help FTBs and mortgage prisoners
The recent increase in gross lending suggests the Government’s Funding for Lending Scheme (FLS) is having a significant impact on the property market. However there remains a firm belief that more must be done to pass on funds to struggling first time buyers and mortgage prisoners in the form of higher loan to value (LTV) mortgages.
Recent figures have shown that 30 lenders have now signed up to the Funding for Lending Scheme, an incentive which 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.
However the majority of products available are for lower LTV rates and therefore not offering any viable solution for first time buyers and mortgage prisoners who continue to struggle to raise the capital needed for a deposit.
With industry experts in broad agreement that the property market is showing gradual signs of stability, and even improvement, there are now calls for lenders to review their lending criteria and lower the rates on their higher LTV products. Then we really will start to see some light at the end of the tunnel.
Content correct at time of publication