It is now a year, yes a whole year, since the Funding For Lending Scheme, (FLS) began. Introduced on 1st August 2012 this was the new flagship scheme which would finally get lenders lending once more where other schemes like Project Merlin disappeared in a puff of smoke.
It was interesting therefore to read research conducted by the Intermediary Mortgage Lenders Association, (IMLA) that said that more than a quarter of brokers feel it has underperformed and whilst some £16 billion has been drawn down, net lending has not jumped.
To be honest, I am not sure what everyone really expected. It was never going to be as easy as that, nor, by the way will it be as simple with the much talked about Help To Buy 2 Scheme. The success of the FLS scheme, apart from an obvious overall drop in product rates, is that it has contributed towards more positive sentiment in the market.
I do not know many brokers who are not much busier than they were a year ago and whilst there will of course be regional variations, brokers across the country I have spoken to are all experiencing higher enquiry levels that look set to continue throughout the summer.
Lenders, however, do still need to do better and it is true that some of the increased lending talk of January looks a way off now. To be fair, they still face many challenges in terms of capital adequacy, a lack of staff and/or systems able to process higher levels of business, a shortage of valuers and, let’s not forget, much behind the scenes planning to do for MMR.
However, it is not all about how cheap rates are, (they are ridiculously cheap), but it is now down to the ability of lenders to service increased demand and changes in criteria that enable more people to take advantage of low rates.
I expect the last quarter of the year to be interesting and perhaps it is still too early to judge its actual effectiveness, though to write it off now would be very unfair.
One thing is for sure; September, October and November are gonna be crazy busy…