Martin Woodhead from Mortgage Advice Bureau

Martin Woodhead from Mortgage Advice Bureau comments on the continuing effects of the Funding for Lending Scheme on the mortgage market:

Despite the Bank of England�s recent decision to yet again hold the Base Rate at 0.5% and refrain from pumping further funding into the economy in the form of quantitative easing, the arguments in favour of a change are building momentum.

The minutes of their most recent meeting show that the Governor of the Bank of England himself voted for an increase in the quantitative easing programme.� However, with the current total already standing at �375bn, adopting the cautious approach for the time being is certainly understandable.

It may only be a matter of time before something needs to change though, with recent news highlighting several significant economic indicators reporting continued weakness in the wider economy.

There is certainly some cause for optimism though as far as the mortgage market goes.� Last month we continued to see further competitive pressure in the pricing of mortgage products.� This is no doubt at least partly driven by the access to the Government�s Funding for Lending Scheme (FLS).

This scheme is allowing banks and building societies to access funding at below market rates provided they can evidence an increase in their net lending over the duration of the programme, boosting appetite for lending within the market.

At the beginning of March 2013 the average two year fixed rate had fallen below 4% for the first time, and is currently 3.90%.� Average three and five year fixed rates have also fallen further in the last month to 4.25% and 4.05% respectively.

Borrowers remain firmly committed to fixed rate mortgage products with more than 90% of customers electing to fix in January and February.

Borrowers are set to continue to benefit from what are �all time low� interest rates and consumer choice is also improving slowly but surely with the number of mortgage products typically available to intermediaries now standing at a little under 6,400, the highest number in more than twelve months.

To see if you could take advantage of these low rates whether you are remortgaging or buying for the first time, or to discuss your circumstances in more detail, call Martin on 01782 664995 or email

Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.