Speaking at the Pink Network conference in Oxfordshire, Gardner said that the recently launched government scheme would not convert to mortgage lending just ease credit conditions for lenders.
He compared the UK’s economic outlook to the prolonged slowdown in growth suffered by Japan in the 1990s and said that such schemes would not improve market conditions, but merely prevent them getting worse.
“The success of the Funding for Lending Scheme is unlikely to be a massive surge in new borrowing, as households already have a lot of debt on their balance sheets. But what it has avoided is a reduction in the availability of credit across the economy, which would have been incredibly damaging.
“What FLS has done is removed the risk for the lenders in case the cost of credit shot up. But these measures have been put in place to make sure we don’t achieve an even worse outcome.
“I think FLS is working, and will continue to work, by making sure that credit is there for those lenders who want it. If that wasn’t the case we’d be looking at a much more difficult outlook for the whole market.”
