Credit where credit is due?

Cheap mortgage deals are largely available to those with a hefty deposit Photo: PA

Last summer, as Eurozone countries edged towards the brink, the Bank of England and the Treasury came up with a plan.

It was a plan to get more money out into the economy; a plan to stop credit drying up, and business with it.

'Funding for Lending' was designed to reward banks with cheap loans the more lending they did. And it is bearing some fruit.

But instead of getting more cash out to business, figures yesterday show £4 billion of credit disappeared from firms. The money appears to be going to mortgages.

Mortgage approvals are rising again, back at least to the level of a year ago.

In this climate, it is perhaps to be celebrated that any kind of lending is going back up - not because it is beneficial on its own but because it suggests some demand might be coming back into the economy. (Without it, no one buys anything, manufacturers who make things have fewer customers and we stagnate.)

A survey by Countrywide showed a sharp rise in buy to lets in the last year Credit: PA

But there is a very important caveat to that.

Mortgage deals are the cheapest they have been for years, yet those cracking deals are still largely available to those lucky enough to have a hefty deposit.

Those doing the buying are more likely to already be on the property ladder. A survey by Countrywide showed a rise in buy to lets of 25 percent in the last year.

Again, in this climate it may be better that someone is buying than no one at all. But if all Funding for Lending does is entrench the buying power of those who already have bricks and mortar, it could make buying a first home harder than ever for those who don't.

An unintended consequence perhaps, but one with a painful impact of its own.

There is also some anecdotal evidence that Funding for Lending has led some banks to cut interest rates for savers even further.

They had oodles of cheap cash accessible from the Bank of England, so don't need to try as much to tempt savers to put their money with them.