Mortgages  

50% of brokers expect rejections post-MMR: poll

Responding to the introduction of the tests as part of the mortgage market review, a survey of more than 300 mortgage intermediaries by the Intermediary Mortgage Lenders Association, revealed that 44 per cent believed that more consumers would be turned down.

Some 34 per cent of brokers did not expect stress tests to reduce the number of successful mortgage applicants.

Under the new MMR rules which come into force next April, responsibility for affordability checks will officially pass from brokers to lenders.

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The enhanced regulations will see new stress tests examine whether borrowers can afford their repayments in the event of interest rates rising.

Despite the scepticism by brokers, the research also revealed that they were significantly more confident about the impact of the MMR than they had been at the start of the year.

Some 66 per cent were “not at all worried” in August, compared with 42 per cent in January, while the amount of intermediaries with significant worries dropped from 12 per cent to 4 per cent.

An additional poll of senior representatives of 16 IMLA members, drawn from banks, building societies and specialist lenders, revealed that 73 per cent were confident the checks would not impact borrowers.

Of those polled, Some 20 per cent of respondents were unsure of the effects of the rules on borrowers, while just 7 per cent of lenders expected that significantly more people would be turned down for mortgages.

Some 67 per cent of lenders were currently worried about the impact of MMR, however despite their extra responsibilities under the new rules, no lender had serious concerns.

Peter Williams, executive director of the IMLA, said: “The MMR rules on affordability are built on common sense and are not too far removed from how many lenders already approach the issue. Recent experience has shown how important it is to ensure that mortgage borrowers can reasonably manage their commitments, not just now but in the future.”