Mortgage lending increases to first time buyers…

August 15th 2014
By: Melanie Hollidge

New figures released this week show that mortgage lending to first-time buyers has increased again since new lending regulations were introduced by the Mortgage Market Review, MMR.

According to the figures released by e.surv, there were 66,279 house purchase approvals in July, with 52% increase in high loan-to-value lending resulting in 112,533 approvals.

In April the MMR introduced new affordability tests, which has since forced lenders to check applicants outgoings as well as their income as well as a stress test, to make sure that if interest rates go up that applicants can still afford their repayments.

Paul Smee, director general of the CML, stated 'For the second month running since new FCA rules took effect, lending characteristics remain similar to the market beforehand.

'We now feel confident that, as we would hope, the mortgage market review effect is more gentle dampener than hard brake.'

Mortgage approvals were also 6.9% higher compared to 62,007 in May, which was the first month that mortgage lenders had to comply to the new MMR regulations.

However the lack of cheap housing is rapidly decreasing, which is having an impact on first time buyers purchasing their new home.

Mark Harris, chief executive of mortgage broker SPF Private Clients. However, stated ‘one area of the market which is subdued is remortgaging – all the more surprising when you consider the excellent rates available and the threat of an interest rate rise. One can only assume that homeowners are either struggling to remortgage because of MMR or think it will be difficult, so aren't bothering to apply in the first place.

'Buy-to-let continues to grow as investors seek better returns than they can earn on cash and more certainty than the stock market. Lenders have been cutting buy-to-let rates and easing criteria in an effort to ensure lending volumes are not too dented post-MMR because buy-to-let doesn't come under its remit.

'Investors are benefitting from cheap mortgage rates, less strict criteria and plenty of demand from tenants looking for decent property to rent.'

If you are looking at investing in property in and around Surrey, then why not pop into your local branch of Goodfellows for a chat and a coffee or call our team on 0845 3727070.

Your home could be at risk if you do not keep up your mortgage repayments.

Source: Property Wire