Which? response to The Co-operative Bank’s announcement to help first-time buyers

In response to The Co-operative Bank using the Government’s Funding for Lending Scheme to  help out first-time buyers with a competitive new mortgage product, Which? executive director Richard Lloyd said:

“We have been calling on lenders to use the Funding for Lending Scheme to help first-time buyers and mortgage prisoners so today’s news that The Co-operative Bank is to pass on this cheap finance to those struggling to get on the housing ladder is welcome.

“We want to see more banks follow their lead and pass on lower borrowing costs to all borrowers, not just those with bigger deposits or equity in their homes.”

Which? is calling for:

• The Government to put in place clearer rules for the Funding for Lending Scheme to ensure that banks and building societies pass on this cheap finance to mortgage prisoners and first time buyers.
• The Government to publish its expectations for the scheme, and what safeguards are put in place to ensure that banks pass on cheap funding to consumers.
• Greater transparency from the banks who should publish details of their mortgage lending using the Funding for Lending Scheme.
• Banks to stop increasing arrangement fees, which have risen by around 60% in the past eighteen months to an average of £1,472 in August 2012, to bring down the costs for people to switch to another mortgage deal.

Statement