LONDON, July 3 (Reuters) - Banks reported a sharprise in mortgage lending in the second quarter andpredict a further rise over the next three months, aBank of England survey showed on Wednesday.
The quarterly Credit Conditions Survey said therise mortgage lending had been helped by lowerborrowing costs on the back of the government'sFunding for Lending Scheme and improved consumersentiment.
The FLS was launched last year as a way to getmore credit flowing into the economy. So far, thescheme has had more of an impact on lending formortgages than on loans for companies.
The Bank of England's survey found an improvedeconomic outlook had also boosted demand for corporatecredit in the second quarter. Lenders anticipateddemand for corporate credit to increase in the comingquarter with the biggest rise expected from largefirms.
The availability of corporate credit, however, wasexpected to remain little changed.
Royal Bank of Scotland (RBS) hascommissioned a review of its lending to smallbusinesses, responding to concerns of a shortage offinance in a sector seen as vital to Britain'seconomic revival.
The government-controlled bank is Britain'sbiggest lender to small businesses.
The British government is concerned that pooraccess to finance among smaller firms may thwart asustainable recovery from the country's worst slump indecades.
Separate data from the Bank of England earlierthis week showed lending to non-financial businessesfell by a net 1.27 billion pounds in May. Lending tosmaller firms dropped by 452 million pounds.