For those who are expecting to purchase anything within the real estate arena over the next two years, prepare to exhale.  The Bank of England secured the much talked about Funding for Lending scheme at least through the year 2015.  The scheme has allowed many first time buyers to jump on the property ladder and obtain lending at a lower rate than once expected.  This scheme has led to more activity within both the original loan market and remortgage market.  Banks don’t seem to mind either, as the amount of lending which has taken place over the last several months has been on a steady plane upward.

The average five-year fixed rate mortgage loan has now fallen to below 4%.  Not only are house hunters taking advantage of the lower rates, remortgagers are as well.  The lower rates have even attracted the attention of landlords, as they are buying up more and more to let properties.

Mark Harris, of SPF Private Clients, commented on the impact of the Funding for Lending scheme, saying: “The positive effect on mortgage pricing since the FLS was introduced has been obvious.”

Nigel Bedford, with Largemortgageloans brokerage, commented on how the lending market remains tight, saying: “Funding for Lending has produced cheaper mortgages but it has had limited success in widening access to mortgages as lending criteria remains tight.”

Although the FLS has improved the outlook for those purchasing property or remortgaging current property, one group has been severely damaged by the government plan.  Savers have never seen so much in savings mean so little.  They are getting lower returns on savings now and don’t see any relief coming until at least 2016.