FLS aid for home buyers hurts savers
Wednesday 30 January 2013
The Bank of England's Funding for Lending billions are unlocking the mortgage market but savers are getting their rawest deal for nearly four years as banks fatten margins, it has emerged.
December figures showed an unexpected surge in mortgage loan approvals to 55,578, compared with November's 54,011, in a traditionally quieter month for the housing market.
But the data also showed that the average rate paid by lenders on new savings slumped 0.2 percentage points to 2.11 per cent over the month, the lowest return since the depths of the recession in March 2009.
In contrast the average rate on new mortgages dropped by much less, down 0.07 percentage points to 3.65 per cent.
The Bank's FLS initiative, which allows participants access to cheap funds in return for growing their lending, is expected to see a "significant" boost in credit availability this year. But the Bank's executive director Andrew Bailey told MPs last week lenders had slashed deposit rates much more than mortgages and "the jury is still out on whether we have seen as much adjustment as we ought to see".
Banks will now face new pressure over profits and bonuses.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...