The figures bring the total amount drawn under the government-backed cheap funding scheme to £13.8bn. However, aggregate net lending by all lenders, including non-FLS participants, dropped to -£2.7bn in Q4, before jumping to +£3.1bn in January 2013.
Barclays finished the year with the largest outstanding FLS drawdown of £6bn. It has increased net lending since June by £5.7bn and £1.9bn in Q4 alone.
However, the lender with the second largest outstanding drawdown, Lloyds, reduced net lending over the six months by £5.6bn, over half of which took place in Q4.
Bank of England executive director for markets Paul Fisher said in a recent speech that though lending rates had fallen, it was still early for much extra money to have flowed from the application stage into actual loans: “I would not expect to see a return to rising aggregate quantities until we start getting data for 2013 at the earliest.
“Nevertheless, it does seem that we have the beginnings of a revival in mortgage activity which is visible in the approvals data and that trend is widely supported by business contacts throughout the country.”
Mortgage Simplicity director Chris Love said: “The data has been skewed somewhat by the activities of a few of the larger banks slamming on the lending brakes to bolster their capital bases.
“Look beyond this and there’s no doubt the Funding for Lending Scheme has improved confidence in the market. There are now many more mortgage products than there were a year ago and those products are often a lot cheaper.
“Crucially, the Funding for Lending Scheme is helping more first-time buyers get a foot on the property ladder, although lenders’ stringent criteria are still excluding borrowers who have a less than perfect credit or income profile.”