The level of mortgage lending fell in the second month of the year according to the British Bankers’ Association (BBA).  In comparison to February of last year there was a drop of 6% in the number of mortgages approved.  The total was 30,506 which was the lowest figure recorded for mortgages since July 2012.  The value of mortgages fell by £65 million compared to the previous month.

Critics remarked that the Funding for Lending scheme is failing to make the impact needed to thaw the housing market and mortgage lending arena.

Ashley Brown, with the mortgage broker Moneysprite, stated, “With half the country frozen solid, Britain's mortgage lending climate is sliding back into the deep freeze too.

"This is despite the Funding for Lending Scheme's success at unblocking the credit pipeline.”

The BBA reported that in the last twelve months had revealed that the value of mortgage lending had risen by 0.1%.

David Dooks, with the BBA, said, “Banks continue to support household borrowers, providing almost £8 billion of mortgage lending in February.

“But low interest rates allow homeowners more scope to increase repayments on their mortgages and reduce the outstanding amount.”

Mortgage interest rates have remained low due to the Funding for Lending scheme.  Lenders have been in a competitive mode since the scheme began to take hold pushing lending interest rates low to historic levels with many below the 3% interest rate level and some dropping below 2%. 

Remortgage interest rates have benefitted too.  Many homeowners have been able to secure low interest rates that have allowed them to save money on their repayments and escape the risky and rising standard variable rates of many lenders.