'Still too early' to judge FLS, say the CML

In their monthly 'News and Views' section they seemed to have a cautiously optimistic outlook on the mortgage market, covering topics such as government schemes NewBuy and FLS, although they noted that the 'final outcome remains uncertain' for the Funding for Lending Scheme.

In the report, the CML said:

"Initial support for the FLS has been positive, but it is still too early to judge its full potential impact on the mortgage market. An encouragingly broad range of lenders have already signed up the scheme, and some firms have linked it to the introduction of attractive rates for borrowers, whether as individuals or businesses. The Bank will continue to publish data about the impact of the FLS, but some lenders may opt not to draw on the scheme and non-bank lenders are not eligible to join it.

"Like the Newbuy scheme, which has made a modest but positive contribution in its first six months, the FLS is part of a raft of government measures, many of which seek to incentivise behaviour through a series of guarantees. Pressures on public finances leave little room for manoeuvre for the authorities, but there are encouraging signs that the cumulative effects of a range of initiatives are having a positive effect currently on lender confidence and activity."