The end of the FLS could be the beginning of the end for low rates but it is also said that the scheme has held back other lines of funding


While the news that the Funding for Lending Scheme is being withdrawn for mortgages seems to have come out of the blue, given the way that the housing market has been reacting of late it is not quite such a big surprise.

This type of aid has to end eventually and focussing on the small business sector which requires more assistance is a sensible move.

While lenders may have been preparing for the end of this scheme and looking at other lines of funding which is much improved, this could be the beginning of the end for historically low rates.

I suspect this will result in some rate rises from lenders however there is another school of thought that suggests that the FLS has held back the development of other funding lines. Either way, the ending of a government support package represents a significant line in the sand and whether it is too soon or not remains to be seen.


But what is a touch worrying is the potential powers outlined to control LTVs and loan to income ratios which could seriously affect for example, the first-time buyer market and set us all back.

In the markets, three month Libor is ever-present at 0.52 per cent, and swap rates have risen by the merest of tads.

  • 1-year money is unchanged at 0.575 per cent                 
  • 2-year money is up 0.01 at 0.81 per cent
  • 3-year money is up 0.01 at 1.09 per cent
  • 5-year money is up 0.03 at 1.735 per cent

Product wise Santander has launched a new 80 per cent LTV 2 year fixed product priced at 2.74 per cent and cut it’s five year fixed rate at 85 per cent LTV by 0.35 per cent to 4.14 per cent. I must say I agree with Santander for Intemediaries mangaging director Miguel Sard’s latest comments and am pleased to see its levels of service still standing strong and putting some others to shame.


Coventry is changing some of its products this week with, amongst others, its flex for term rate increasing to 2.09 per cent with no penalties.

Metro Bank has some new products with rates from 2.99 per cent for a five-year fixed rate at 60 per cent LTV. It has no valuation or legal fees up to £1.5m for remortgages. Its two-year tracker is available at 2.59 per cent up to 70 per cent LTV or to 65 per cent LTV between £1.5m and £3m.

Clydesdale Bank has a new fees free deal at 2.69 per cent fixed for two years up to 75 per cent LTV and a new five-year fixed product at 3.29 per cent for loans over £1m up to 60 per cent LTV.

Continuing to impress in the specialist field, Kent Reliance has made some changes to criteria including reducing the number of years accounts required from three years to two years and also removing its minimum income level of £25,000 for buy-to-let deals. A verified income is still required however.

Well done to the Association of Mortgage Intermediaries for calling for amended CCL rules as fees seem to be getting out of hand. Another example of the good work that the trade body’s chief executive Robert Sinclair and the team undertake on our behalf which we should all be backing.

Finally, it would be remiss of me not to mention PMS chairman John Malone who at age 70 finally, finally, finally retires. A hero to many, a villain to some who have been on the wrong end of his hairdryer treatment, the man simply is a legend and personally, I want to thank him for all the words of wisdom received over the years.

This “joker from London” is very firmly in the hero camp. Enjoy your retirement, you have earned it.