BoE - FfL housing boost should take hold next year, business not benefiting

Turnbull2000

http://www.telegraph.co.uk/finance/economics/9694142/State-backed-lending-scheme-not-helping-small-business.html

The Bank of England’s agents report found that lenders are “still tightening terms” for smaller companies despite the FLS, which was designed to lower banks’ costs by providing them with cheap, state-backed funding. The FLS was launched on August 1.

Households, however, are enjoying better terms. The FLS “appeared to be working more quickly in the residential mortgage market than in corporate lending”, the agents found. “Mortgage lending rates had begun to ease and the supply of mortgages at higher loan to value ratios was improving.”

Why take a risk on small business when you can take a safer, more profitable bet on UK property?

Jegersmart

Turnbull2000 wrote: »

http://www.telegraph.co.uk/finance/economics/9694142/State-backed-lending-scheme-not-helping-small-business.html



Why take a risk on small business when you can take a safer, more profitable bet on UK property?

No one knows what the future holds, how does one decide what is "safer"?

J

ILW

Jegersmart wrote: »

No one knows what the future holds, how does one decide what is "safer"?

J

The government, banking system etc will bend over backwards to stop you losing money on a BTL. On the other land if you invest in an employment creating new or expanding business, you have something like an 80% chance of losing the lot.

chewmylegoff

ILW wrote: »

The government, banking system etc will bend over backwards to stop you losing money on a BTL. On the other land if you invest in an employment creating new or expanding business, you have something like an 80% chance of losing the lot.

What have the govt done to specifically help BTL investors, I.e. market intervention measures which are not designed to assist homeowners as a whole? I can't think of anything personally. Furthermore BTL mortgages are unregulated so the lender doesn't have an obligation to treat the mortgagee "fairly" in circumstances where the mortgage falls into arrears.

ILW

chewmylegoff wrote: »

What have the govt done to specifically help BTL investors, I.e. market intervention measures which are not designed to assist homeowners as a whole? I can't think of anything personally. Furthermore BTL mortgages are unregulated so the lender doesn't have an obligation to treat the mortgagee "fairly" in circumstances where the mortgage falls into arrears.

True, the housing market in general will be protected. Which does draw investment away from what could be employment generating businesses.

CLAPTON

Not any real facts to go on, but one would take the view that a loan against the security of property would (all other things being equal) be a lot safer than a unsecured loan to a small company.