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FLS sees first significant boost as net lending hits £1.6bn

FS Adam Lewis 160 byline

Lenders participating in the Funding for Lending scheme have registered their first meaningful positive quarterly net lending figures since the scheme’s launch over a year ago.

Bank of England data, published this week, shows net mortgage and business lending was £1.6bn in the second quarter following a negative £1.8bn in Q1 and a negative £2.4bn in Q4 2012.

Net lending was £39m in Q3 2012 although this pales in comparison with the latest figure.

However, while net lending was positive over the last quarter, it is down nearly £2.3bn since the scheme’s launch in July 2012.

Nationwide Building Society boosted its loan book the most in Q2 with net lending of £2.3bn, with Lloyds Banking Group second with £1.3bn.

Virgin Money was third with net lending of £738m followed by Barclays and Coventry, with net lending of £668m and £576m respectively.

Since the scheme’s launch, Barclays has grown its loan book the most, at £7.5bn followed by Nationwide
at £7bn.

At the other end of the scale, Santander has seen net lending fall £10.4bn since the FLS was launched while Royal Bank of Scotland and Lloyds Banking Group’s lending fell by £6.8bn and £5.3bn respectively in that time.

While the Bank of England does not split the figures, it said in total net mortgage lending to individuals, this has been “positive recently and picked up slightly in Q2”, while net lending to businesses “remained negative” over the same period.

SPF Private Clients chief executive Mark Harris says:  “It takes a while for confidence in the housing market to re-emerge after such a long period of doom and gloom and for buyers to realise that lenders have regained their appetite to lend.”



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