The news that house sales have risen to their highest level in five years suggests loans are getting easier to come by.
So are banks and other lenders finally loosening up the purse-strings? And how much of that could be due to the government and Bank of England’s Funding for Lending scheme?
Funding for Lending was launched by the chancellor of the exchequer six months ago, and aims to give up to £60bn to banks and building societies.
The deal is that they get to borrow that money cheaply, as long as they lend it on to businesses and individuals.
In theory, that should boost lending, and the economy.
The Halifax, the UK’s largest house lender, believes the benefits are only just beginning to feed through to the mortgage market.
The government and the Bank of England should make a more aggressive effort to get lenders to take up funds, and promote the scheme”
Others believe it’s too early to credit the scheme for any increase in lending.
The Building Societies Association (BSA) represents 47 building societies, which between them are lending more than £200bn to homeowners.
Initial figures certainly seem to show that lenders were slow to take advantage of the scheme’s cheap money.
According to the Bank of England, only £4.4bn was taken up in the first two months, by just six lenders.
In assessing whether Funding for Lending is starting to take effect, the Bank has made a distinction between the amount of money available, and the cost of borrowing it.
Last month, it said the cost of loans was clearly going down.
But it also expected the amount of money available to lend would not increase markedly until well into 2013.
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