Funding for Lending on mortgages is ended

brit1234

Just on BBC news, they are scrapping funding for lending on mortgages, it will now just support small to medium businesses. Builders shares fallen about 9%.

Funding for Lending killed saving rates, this could bring them up which is good news.

brit1234

Link just up:
http://www.bbc.co.uk/news/business-25137444

michaels

Interesting that the BoE announce this (in their control) on the same day they state that they have no control over HTB - politics at work?

wotsthat

Nice real life example of how things work.

Nothing's for ever.

Graham_Devon

This is just plain bizzare.

Funding for lending has been credited with the rise in house prices and also rise in mortgage approvals.

So are the BOE trying to control rises in house prices?

Wonder if it will make any difference to lending and prices? If the reports on lending and prices were correct...in that funding for lending was fueling the supply, this could do quite a lot of harm to the mortgage market.

Either way, it now seems the BOE are doing things which could disgruntle the government. Especially if this feeds through to a reduction in mortgages again.

This is where the coalition could find they peaked (with the help of monetry support) too soon.

Loughton_Monkey

So stuff that in your pipe and smoke it, Gideon.

.... neat Vodkas all round.....:rotfl:

Graham_Devon

Tsk!

Appears I spoke to soon.

Apparently, according to the telegraph, Carney has warned on rapid house price growth and has done this, presumably as he see's funding for lending as fuelling the growth.

Interesting times. Hamish will have a fit!

FINALLY, we get to see how the markets function without the funny money.

Carney warns rapid house price growth could damage the UK and has decided to withdraw Bank support measures for the property market

michaels

FFL reduced savings rates and reduced borrowing costs for the most credit worthy borrowers.

HTB should reduce borrowing costs for FTBs.

I can see a 'fairness' arguement for using HTB rather than FFL (doing either assumes that supporting the housing market is a worthwhile policy)

Politically if it also boosts rates payable to savers in the run up to the election then it sounds like good news for the govt. However I am guessing this is more about the BOE demonstrating that it can also take a view on the housing market and act on it than the govt getting clever and fine-tuning its policy of how to support house prices.

Graham_Devon

Least we all have something meaty to talk about!

This is a big old change with, maybe, some big old consequences.

Can't say I'm not delighted

chucky

Graham_Devon wrote: »

Least we all have something meaty to talk about!

This is a big old change with, maybe, some big old consequences.

Can't say I'm not delighted

Being delighted at house prices potentially staying flat isn't really a "some big old consequences", unless you think this action will make house prices fall.

Is that what you are expecting to happen, house price falls?

HAMISH_MCTAVISH

Graham_Devon wrote: »

Funding for lending has been credited with the rise in house prices and also rise in mortgage approvals.

Carney said today that supporting the mortgage market through FFL is "no longer necessary".

As you were told all along, these various schemes were designed to restore functionality to dysfunctional markets.

They can and should be withdrawn when that happens.

If the BOE think that the time is right to do so, then they should end it and see what happens.

If lending falls off a cliff, I have no doubt they'll kick support back in again, so well worth a try.