Since August the Funding for Lending (FLS) scheme has been in operation by the Bank of England (BoE).  The scheme allowed lenders to borrow from the government at a lower interest rate than they could find on the global lending market.  This allowed the lenders to then offer low interest rates to UK borrowers and it also kept funds flowing to those borrowers needing it. 

The introduction of the scheme was met with many skeptics in the first few months but then all new things are often met with criticism.  However, now there is evidence that the efforts of the BoE to keep lenders funded and interest rates low is working.  The latest Credit Conditions Survey which is issued quarterly from the BoE revealed that there was a higher level of available secured credit to households in the last quarter of 2012.  It was in fact, the newest high recorded since the survey started being researched and published in 2007.

In the last quarter lenders increased lending to borrowers with smaller deposits the report revealed and that intentions are to increase their loan-to-value levels to assist first time buyers.  Lenders also expect to increase their lending levels within the first quarter of this year. 

The BoE stated, “Lenders noted that the FLS had been an important factor behind this increase, consistent with a reported easing in wholesale funding conditions, pushing up significantly on credit availability.”

Homeowners seeking to remortgage could find that with lending easing and low, attractive interest rate deals on the table that there are more attractive deals than they have seen in quite a while.  Also the much needed return of the first time buyer could make a reappearance in the seasonal surge of the housing market in a few months.