The biggest mortgage story this week is a decline in mortgage approvals. The Bank of England has reported that the number of mortgages approved has been dropping for three months. Sounds like bad news, right?
Well, the Mortgage Advice Bureau reckons it’s not much to worry about. This is to be expected following tightening of lending regulation (which we have been covering).
The Mortgage Market Review (MMR) regulations have been expected for a long time, but they only came into effect at the end of April. They require lenders to make sure borrowers can afford the mortgages they’re offering.
MAB’s Brian Murphy says:
“It’s barely a month since new affordability rules were set in stone on 26 April.
“The fact that purchase, remortgage and other mortgage approvals all slowed during April is reason enough to pause and assess the full impact of these changes before adding further constraints to the market.
“The changes are no reason to panic as thousands of people are still finding that mortgage finance is available.
“[But] It will still take a number of months to see where things stand, and there is a real danger of acting too soon and shooting the recovery in the foot.”
We can say that we haven’t noticed any significant drop in approvals for our clients. I reckon this is because we always make sure to find the right mortgage for each client’s situation, and are not caught short by affordability questions.
Give us a call for advice about your own mortgage situation.
