Bank's funding scheme boosts mortgage market at last

The Bank of England's Funding for Lending scheme is finally breathing life into a largely moribund mortgage market after a 14 per cent jump in home loans in October, the Council of Mortgage Lenders said yesterday.

Lenders advanced £12.9bn in house purchase and remortgage loans over the month, well ahead of September's £11.4bn and the highest amount since last November, its figures showed. Lending was also 4 per cent ahead of the same month last year.

The CML's chief economist Bob Pannell said: "The FLS is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery."

The scheme allows lenders to tap cheap funds in return for increasing their lending. A total of 30 lenders accounting for £1.3 trillion in net lending have so far signed up.