It was only a few months ago that the global lending market was so expensive for lenders to fund their loans that the interest rates on new loans were climbing as well as many lender’s standard variable rates (SVR).  The government stepped in and offered lenders the ability to step away from the global lending market and get their funding through the “Funding for Lending” scheme.  This kept lending readily available for those needing funds and kept the interest rates cheap.  It wasn’t long before the rates on loans began to drop and for mortgages some of the rates became historically low.

Because of the Funding for Lending scheme the housing market was expected to get a boost as mortgages were dropping below the 3% level.  It took time for the lenders to benefit and start lowering interest rates and it would take a while for home buyers to secure an approval for a new property purchase.  No one was sure when exactly the housing market would benefit but there was a strong expectation that the boost would eventually be there.

Up to August little had changed in the housing market and in September house prices remained flat.  The boost is yet to be seen despite the lower interest rates and the higher loan to value levels that have come available.

Remortgages are also at attractive levels and demand has yet to show that homeowners are showing more attraction to getting a new deal versus remaining on standard variable rates despite rates still being increased by some lenders.

Experts feel that time will show that the Funding for Lending scheme did assist the consumer in keeping loans readily available and interest rates affordable despite the weakness of the global lending market.  It just may take some time for the benefit of the scheme to be revealed.