The Government’s new Funding for Lending Scheme (FLS) is designed to pump money into the economy by making cheap sources of borrowing available to banks, who can then lend it on cheaply to those in the real economy. It is hoped this will benefit the beleaguered First Time Buyer by providing cheaper mortgage finance, thus boosting demand across the property sector. A lack of affordable funding has to date has been a major constraint on the housing market, leading to fewer new homes being built because of lack of demand, which in turn leads to the housing supply crisis we are currently enduring.
The success of the scheme is very much in the hands of the lenders, if it works it should lead to more homes being built, which will help the construction sector, and a healthier property market.
