Most types of mortgage lending recorded a rise in March ahead of the introduction of tough new affordability checks as part of the Mortgage Market Review requirements, Council of Mortgage Lenders statistics reveal.
CML data released today (15 May) revealed the total number of new loans to home-owners for house purchase increased 4 per cent in March compared with the previous month and was 17 per cent up on March 2013.
The number of loans for home-owner house purchase over the first quarter of 2014 as a whole decreased by 16 per cent compared with the fourth quarter of 2013, but was up 27 per cent compared with the first three months of 2013.
A number of brokers and market commentators have expressed concern the new rules, which require lenders to perform tough checks on the income and outgoings of prospective homeowners and project affordability in the event of an interest rate rise, would reduce mortgage availability.
Last month, a survey of more than 1,600 brokers found 47 per cent had concerns the rules that came into force on 26 April would limit the availability of mortgage products, while 50 per cent believed the MMR would hinder some consumers in their ability to get a mortgage.
Paul Smee, the director general of the CML who has previously warned of a temporary “distorting effect” on the market from MMR, said the council does “not anticipate prolonged disruption to the market as a consequence of the rules changes”.
He added: “The FCA’s new regulation of mortgages has now been introduced, but it will still be some time until we can assess its effect on the market.”
The data show first-time buyers took out 24,400 loans in March, 24 per cent more than in March last year. In quarter one of 2014, there were 34 per cent more first-time buyer loans compared to the first quarter of 2013.
Home mover loans was the same in March as in February but the number of loans was 11 per cent more than in March 2013. In the first quarter of 2014 home movers took out 79,000 loans, a decrease of 19 per cent compared with the previous quarter but up 20 per cent on last year.
The total number of loans taken out by home-owners for remortgage in March was 2 per cent more than in February and 5 per cent higher than in March 2013. Remortgage lending fell in Q1 compared to quarter four of 2013 by 6 per cent, but increased 14 per cent compared to 2013.
Gross buy-to-let loans advanced increased in March by 10 per cent compared with February and by 56 per cent on March last year. Over the quarter buy-to-let lending was up 1 per cent compared with the fourth quarter of 2013 and 46 per cent in volume compared to quarter one last year.
