9:03 AM, 3rd January 2018, About 4 years ago
The Funding for Lending Scheme (FLS) was made available by the Bank of England to encourage banks and building societies to lend more to households and businesses. It did this by providing funding to these firms for an extended period, with the quantity of funding we provide linked to their lending performance.
The FLS allows firms taking part to borrow UK Treasury Bills in exchange for eligible collateral. It was launched by the Bank and the Treasury in 2012. Firms could borrow from the scheme until January 2018.
The concern is this withdrawal of more cost effective funding may have an upward pressure on the cost of mortgages and Buy to Let.
It is unclear by how much and by when this could feed into the system as many lenders have been recently cutting rates.
You can see from the chart below who was making use of the FLS and might therefore be affected.
|FLS Group||Aggregate outstanding FLS drawings as at 30/09/17 (£mn)|
|Total||of which net FLS Extension drawings|
|Bank of Cyprus||75||75|
|Bath Investment & Building Society||0||0|
|Cambridge & Counties Bank||44||44|
|Cambridge Building Society||60||60|
|Charter Court Financial Services||0||0|
|Coventry Building Society||1,000||1,000|
|Cumberland Building Society||325||325|
|Furness Building Society||30||0|
|Hinckley & Rugby Building Society||0||0|
|Julian Hodge Bank||37||37|
|Leeds Building Society||0||0|
|Leek United Building Society||0||0|
|Lloyds Banking Group||27,100||23,100|
|Mansfield Building Society||21||10|
|Market Harborough Building Society||51||51|
|Monmouthshire Building Society||0||0|
|Nationwide Building Society||3,000||0|
|Newbury Building Society||44||44|
|Nottingham Building Society||380||230|
|Progressive Building Society||0||0|
|Saffron Building Society||25||25|
|Secure Trust Bank||0||0|
|Skipton Building Society||400||400|
|Teachers Building Society||8||5|
|United Trust Bank||30||30|
|Yorkshire Building Society||2,900||2,900|
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