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MSE News: Funding for Lending scheme fails to boost mortgages
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Former_MSE_Helen
Posts: 2,382 Forumite
"Banks and building societies participating in the FLS shrunk net lending by £300 million in the first quarter the year..."
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Funding for Lending scheme fails to boost mortgages
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Funding for Lending scheme fails to boost mortgages
Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
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MSE says:
Bank of England says:The Bank of England hasn't split out lending to home buyers and businesses. It says since 2012 lending flows to individuals have been "typically positive", while lending to businesses has "mostly been negative".
It adds there is also evidence that rates on mortgages, unsecured personal loans, and loans to businesses have fallen since the FLS began.
So mortgage lending to individuals has increased and the cost of new mortgage loans has fallen.
Loan balances owed by businesses were bound to fall. Of course net lending has shrunk. It was always going to shrink.
Banks have stopped lending to some business segments (where they should never really have been lending in the first place) and are winding down these assets. The debts are being repaid or written off.
It doesn't mean that FLS isn't doing what it's intended to do though. Just look at the cheaper mortgage market to see the impact.
Again, big headline, poor detail. Well done.0 -
Also in wrong forum?0
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No mention of the fact that Nationwide and Barclays have each increased lending by over £1bn ... is this not relatively significant?
It's pretty clear that FLS has been a massive boost to mortgage lending.0 -
Government funding is a benefit for bankers. Cheap money warps the market, so savings rates are on the floor. The true course of economy is turned topsy turvy: the profligate rewarded, the careful punished. This is immoral.0
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I disagree - the problem is that much of the cheap lending has gone on the buy to let market - rents are high meaning people have to pay rent AND try to save enough for a deposit to buy their own place.0
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