BoE's Funding for Lending Scheme aids buy-to-let landlords

N.R. | ShareCast | 25 Apr, 2013 12:37 - Updated: 13:24 | | |

Harry Potter

The Bank of England (BoE)’s Funding for Lending Scheme will provide a major boost to the property market through supporting buy-to-let (BTL) landlords, the Financial Times reported Thursday.

The BoE has given the green light for banks to access its new funding programme to lend to property investors.

The scheme offers aid to small and medium sized businesses (SME), which are defined as companies with an annual turnover less than £25m.

While it is intended to bolster SMEs, it will also help drive the housing sector. The sector has already reaped the rewards of lower borrowing costs from banks.

The average buy-to-let rate has fallen to 4.28% from 5.09% in August when the FLS was launched, data from Moneyfacts showed. Subsequently, buy–to-let mortgages reached its highest level in four years as buy-to-lending grew 19% last year.

"It could be a no-brainer," said Rob Wood, Chief UK Economist at Berenberg Bank.

"Lend to a landlord – collateral easy to price – and get 10 times that lending back as essentially free funding, then recycle some of that back out again on mortgages or BTL."

FLS is the only government scheme that has not specifically excluded buy-to-let investors despite various incentives aimed at replenishing the housing market.

RD

More news

22 Nov Weekend of sport guarantees fireworks aplenty

At long last the weekend has finally arrived and sports fans will be spoilt for choices over the next few days, with world championships and reputations on the line.

21 Nov US close: Stocks rally amid positive news from Europe and China

US stocks rallied on Friday, as oil and metal prices rose after a surprise rate cut from China’s central bank.

21 Nov Bank of England opens probe into own staff, according to FT

21 Nov S&P 500 climbs to new record as Europe and China fuel optimism

21 Nov European parliament calls for Google break-up

The European parliament is set to demand a break-up of Google, in a direct attack to the US technology giant.

21 Nov Nougat calls in administrators after falling victim to warm UK autumn

British clothing and beauty brand Nougat has been forced to call in administrators, after becoming the first victim of the UK's unseasonably warm autumn.

21 Nov Ulster Bank to close 24 branches

Ulster Bank is set to close 24 branches across Ireland early in 2015, despite warnings that large areas risked becoming "financially forgotten".

21 Nov Red Rock Resources FY losses narrow on the back of lower costs

Mineral exploration firm Red Rock Resources said its pretax loss for the year had narrowed, due to a reduction in costs.

21 Nov Aviva in negotiations to purchase Friends Life

British insurance provider Aviva has opened negotiations to buy sector peers Friends Life for £5.6bn.

21 Nov Ophir Energy submits offer for Salamander Energy

British oil and gas explorer Ophir Energy has offered to purchase Salamander Energy for £267m to expand in southeast Asia.

Advertising

HIGHLIGHTS

new_spurs_stadium_286_200
Weekend of sport guarantees fireworks aplenty

At long last the weekend has finally arrived and sports fans will be spoilt for choices over the next few days.

VIDEOS

Support and resistance levels Support and resistance levels 21th november 2014
REGISTER NOW!