The lack of buyers in the housing market has been hurting the economy.  Many attempts have been made to try and bring buyers back.  Over the past few years small boosts have occurred in the numbers but those boosts have all been short lived.  The latest attempt at keeping funds available from lenders and borrowing cheap for consumers was the scheme offered by the Bank of England named Funding for Lending (FfL).  The FfL offered funding to lenders at cheaper interest rates than what could be found on the global lending market.  This allowed lenders to keep their costs down and therefore the trickle-down effect would be cheap interest rates on loans from lenders and a flow of lending kept moving to consumers.

The August data has revealed in many mortgage lending reports that the number of mortgage approvals did not increase.  Some assume therefore that if the numbers did not boost immediately then there is a failure of the FfL.  The truth is that it will take time for buyers to realize there is a change in the lending market.  They will then have to shop for a property, make hard decisions, and then seek approval which takes time. 

The good news is that mortgage lending approvals remained basically flat in the month of August and therefore there was no decline.  It is expected that the reports on the economy concerning the third quarter will give new optimism by announcing an end to the double dip recession.  The view of the economy and future will be different for those considering a property purchase and that may bring some back to the housing market.  The loan approval numbers before the credit crash may be far off from our current levels but perhaps it is becoming the new norm.