Mortgage funds to rise significantly, Bank of England says

The supply of mortgage funds will be increased “significantly” by the Funding for Lending Scheme (FLS), says the Bank of England.

A survey of lenders by the Bank reports that lending picked up in the last three months of 2012, and will continue to do so in the coming months.

Separately, the Nationwide building society said that house prices fell by 1% in 2012.

And it predicted little change in either prices or sales this year.

The building society said that the average UK property was valued at £162,262 at the end of 2012, following a 0.1% drop in December.

The Bank of England’s Credit Conditions Survey found that the mortgage funds for Lending Scheme, launched at the start of August 2012, was now helping to increase the flow of money to borrowers.

The aim of the scheme is to channel as much as £60bn of cheap money to lenders, on condition that they then lend it to households, and to companies outside the financial sector.

An initial report on the scheme, published by the Bank in early December, found that lending to households and businesses increased only slightly in the third quarter of the year, as the new scheme got under way.

Since then, its effect has grown stronger. To read more click on the BBC Website.