We have written quite a bit about the Mortgage Market Review (MMR) over the past few months. It’s a market-changing set of guidelines from the Financial Conduct Authority, and one of its biggest changes is in the way mortgages are allowed to be sold.
Mortgages must be advised, and with that affordability needs to be taken into consideration. David wrote that this has not affected the time it takes us, because we always take affordability into account.
For the wider market, though, it looks like the MMR is a probable cause for some slow-down in growth.
A recent article in the Financial Times attributes the tighter rules to “discounts” – where homes are sold for less than the asking price. The number of discounts rose in July from June, and a number of commentators are expecting a slow in the recent house-price rise.
The FT article, for example quotes Savills’ residential research director Lucian Cook:
“The heat is coming out of the market in response to prospective interest rate rises and limits on mortgage borrowing. We expect much lower price growth over the next four years, particularly in London and the south of the country.”