If you read the national press, the ‘funding for lending’ scheme appears to be under some scrutiny. In short, the scheme was designed to provide relatively cheap funding from the Bank of England to a number of lenders as long as they maintained or increased their net lending on mortgages (or business loans). However, recent reports suggest that since its launch in August 2012, the FLS scheme has seen an overall decrease in net lending of 1.8bn and a £300m decrease in Q1 2013 alone.
Other reports highlight a reduction in house purchases for April 2013. But if you delve slightly more in to the figures, the house purchase numbers for April were 53,710, representing £8bn. This was against 53,674 loans approved in March! So for the sake of 36 deals, the purchase market is not in apparent ‘freefall’….! This should not make for newsworthy headlines! Of course the headlines did not cover that the number of approvals for remortgaging were by up by nearly 2,000 compared to the six monthly average of 28,323 to at 30,313, and £4.3bn in volume.
From dealing on the front line, I would dare to suggest that consumer confidence in financial services appears to be the highest it has been for some years. People are selling, people are buying and many are remortgaging! It’s not just set to one geographical area either, although appears to be more southern based than northern, but it really is ‘all types of mortgages’! From the straight forward, to the complex, to the commercial shop front, to the credit issues, to the first time landlord with their first investment property, we are seeing many different scenarios. We’re even having lenders come back to us on a Monday, backtracking on their previous decline decision on the Friday, having thought about the case and it’s scenario over a weekend and now wishing to offer terms! This really does bring a new meaning to the ‘thinking outside the box’ analogy.
There are also a few new lenders waiting in the wings to launch and create more competition in an already increasingly competitive market. One that we know of will be filling a current gap in the market place, and that’s all I’m currently allowed to say! But more lenders competing for business can only be a good thing to the end consumer.