Not so anti Funding for Lending scheme

I often fail miserably to understand a new government proposal designed to grease the wheels of the housing market. 

Hugh Wade-Jones

It’s become a sad joke when the stats are released that for a handful of people to benefit from the latest scheme, it has cost millions of pounds, meaning it would have been far cheaper to simply buy these people their homes outright than bother with all the faff.

That was why I was more than a little sceptical at the latest Funding for Lending Scheme.

Under the new scheme, banks and building societies will initially be able to borrow up to 5 per cent of their stock of existing lending at a vastly discounted rate and in return offer borrowers a 1 per cent discount on rate and no fee.

At first my cynical brain was working overtime; what, no requirement to have lived in a certain borough for a number of years? No minimum income level? But that‘s the beauty of it, you offer people cheaper money and lower fees and low and behold borrowing starts to flow again.

We’ve seen our first deal on the scheme this week for a prominent British designer buying a rather beautiful office block.

Although one should adhere to the banker bashing rhetoric that the rich are abusing the scheme questioning why an already successful individual should further profit, one should think about the people who will benefit.

In the purchase chain alone agents, mortgage brokers, solicitors, surveyors and then after completion removal men, cleaners, builders, security guards all seeing business they wouldn’t otherwise enjoy.

I’m not naïve enough to believe the chancellor George Osborne when he says’ We’re all in this together’ but I’m certain it will take all of us to get out.