Last week, the Bank of England noted in its credit condition survey: “The availability of secured credit to households was reported to have increased significantly in the three months to mid-December 2012, driven in part by the Funding for Lending Scheme. A further significant increase was expected over the next three months.”

It comes against the backdrop of a rash of announcements of improved mortgage rates, and not just among the lower risk end of the market – in the run up to Christmas, Chelsea Building Society announced a 90% LTV two-year fixed rate deal at 3.89%.

This trend of lenders cutting mortgage rates is likely to continue into the foreseeable future, according to mortgage intermediary sales manager Tracy Simpson of Cambridge Building Society, which yesterday reduced rates by up to 0.70%. “As funding for lending really kicks in and the demand for mortgage business rises, rates will continue to plummet,” she said. “It stimulated competition in the market in the final quarter of 2012 and we expect more of the same throughout 2013.

“We have already seen some significant improvements to the lower LTV rates and now expect to see more competitive higher LTV products following suit.”

FLS may turn out to be a rare coup for George Osborne, who mentioned it as an example of an “innovative monetary operation” when giving evidence to the Treasury Committee in December.

Some of this month’s rate reductions stemmed from the introduction of the cheap borrowing scheme in August, MoneySupermarket editor Clare Francis said, with more to come. But she suggested context was important: “There are currently 259 90% LTV mortgages available compared to 240 in August before FLS. However in December 2011 there were 301.

“So it is still not the case to say FLS has solved all problems although it’s moving in the right direction.”

And she warned the focus on competition creeping up the LTV scale could mask the increase in other costs associated with mortgages, such as an increase in fees: “While lenders have access to cheaper funding they have still got to have capital in reserve – they will still be looking to use products in a way that ensures they have the right margins.”

Brokers needed to be aware of factoring in the total cost, she added. “Customers often overlook the fact they just look at the interest rate and they do not factor in the impact the fee can have.”

Two Lloyds-owned institutions – Halifax and BM Solutions – have also reduced rates by 0.15% and 0.40% respectively. Nevertheless, Lloyds Banking Group director of intermediaries Mike Jones also provided a mixed analysis. “Record low interest rates have also contributed to much more competitive rates on offer and we are starting to see the results with CML reporting an uptick in lending volumes for the end of the year. We have seen rates reduce across the market in line with the aims of the Government’s FLS scheme. I suspect that we will continue to see more competitive rates well into the New Year.”

However, the property market was unlikely to see much movement in house prices over 2013 and would remain challenging for first-time buyers and home-movers, he added.

With competition still focused on lower risk mortgages and arrangement fees keeping initial costs high, first-time buyers may remain out in the cold. But lenders’ readiness to cut rates suggests brokers have a lot to look forward to in the coming months.