Funding for Lending: Is it working yet?
The news that house sales have risen to their highest level in five years suggests loans are getting easier to come by.
So are banks and other lenders finally loosening up the purse-strings? And how much of that could be due to the government and Bank of England's Funding for Lending scheme?
Funding for Lending was launched by the chancellor of the exchequer six months ago, and aims to give up to £60bn to banks and building societies.
The deal is that they get to borrow that money cheaply, as long as they lend it on to businesses and individuals.
In theory, that should boost lending, and the economy.
The Halifax, the UK's largest house lender, believes the benefits are only just beginning to feed through to the mortgage market.
"I suspect Funding for Lending is having an effect, but it's difficult to quantify," says the bank's chief economist Martin Ellis.
"The scheme has only been in place since last summer, but it's helping to support, and push up, the level of sales."
Others believe it's too early to credit the scheme for any increase in lending.
The Building Societies Association (BSA) represents 47 building societies, which between them are lending more than £200bn to homeowners.
"I think the publicity for Funding for Lending at its launch in the summer may have had a small impact on sentiment," says Paul Broadhead, head of mortgages at the BSA.
"But it was a short window between there and December, the end of the period measured by HMRC. Yes, the scheme will have helped confidence, but the amount of money drawn down will have a bigger impact in the first half of 2013."
Initial figures certainly seem to show that lenders were slow to take advantage of the scheme's cheap money.
According to the Bank of England, only £4.4bn was taken up in the first two months, by just six lenders.
In assessing whether Funding for Lending is starting to take effect, the Bank has made a distinction between the amount of money available, and the cost of borrowing it.
Last month, it said the cost of loans was clearly going down.
"Early signs have been encouraging - market funding costs for UK banks have fallen sharply and many loan rates have fallen," said a Bank spokesperson.
But it also expected the amount of money available to lend would not increase markedly until well into 2013.
"Given the usual lags from credit being offered to loans being made, Funding for Lending is unlikely to materially affect lending volumes until 2013," the Bank predicted.
But if Funding for Lending may be on the verge of improving conditions in the mortgage market, there is no sign at all that loans to businesses are becoming any more available, or cheaper.
Figures from the Bank of England this week show that lending to businesses has continued to fall.
In the three months to November 2012, businesses borrowed £4 billion less than in the previous quarter.
That continues a trend which has been in place since 2009.
"We're not seeing any significant feed-through to business lending," says Adam Marshall, policy director at the British Chambers of Commerce (BCC).
He is also concerned that not all the banks and building societies are taking part in the scheme.
HSBC, for example, says it has enough money of its own to lend out, so doesn't need to be involved.
"The government and the Bank of England should make a more aggressive effort to get lenders to take up funds, and promote the scheme," he says.
Benefits to business
But lenders are quick to defend themselves.
On its website, Lloyds Bank claims it has reduced the cost of loans to businesses, and commercial mortgages, by 1%, directly as a result of Funding for Lending.
The British Bankers Association says it is not surprising that the mortgage market is benefiting much earlier than the business loans market.
"Mortgages are relatively simple products," it says.
"But with a business loan, banks will need to look at the supply chain and many other issues."
It also says that many more lenders deal in mortgages than in loans, so homeowners stand to benefit first.
And it points to the latest credit availability figures from the Bank of England, which suggest that the amount of money available to lend out is at an all-time high.
It claims many companies just don't want to borrow at the moment, because they're paying off debt as a priority.
Businesses have a different word for that scenario.
In a veiled attack on the banks, Adam Marshall of the BCC calls it "discouraged demand."
And he warns that Funding for Lending is still a long way from providing real help to the economy.
"It's very early days, and we're going to have to keep an eagle eye on Funding for Lending.
"Helping the mortgage market alone is not enough."