Funding for Lending Bank Scheme Launched

A new scheme to prompt banks and other lenders to make more money available to homeowners and businesses has come into operation.

Under the Funding for Lending initiative, the Bank of England will lend money at below-market rates to the financial institutions.

The Bank will then monitor their progress in lending the cash out.

Some mortgage lenders have already cut the cost of their long-term, fixed-rate deals.

But the lower borrowing costs being introduced by mortgage lenders are so far only being offered to people with large deposits.

Aaron Strutt, at mortgage brokers Trinity Financial, said: "Most deals attractive to first-time buyers, such as those at 90% or 95% loan-to-value, have not changed yet."

The introduction of the new lending scheme comes as the Nationwide building society said house prices had fallen last month for the fourth time in five months.

Source and read more: BBC News