The number of mortgages arranged for house purchases in May fell to a nine-month low. According to statistics, in May, 18,206 loans were agreed compared with 20,448 in April, suggesting that the market may be finally starting to cool.
This fall has come amid new MMR regulations, and the Bank of England’s indications that a higher interest rate could be introduced. The regulations have led mortgage lenders to heavily assess the ability of a borrower to repay their loan, considering the higher interest rates. The fall could also be due to lenders familiarising themselves with the new and longer procedure following stricter regulation.
Despite these statistics, the Council of Mortgage Lenders has reported an increase in the size of loans, suggesting that although fewer people are borrowing, the value of property is increasing. Either the less eligible are not applying and waiting to see what will happen with the rates, or they’re being denied a loan, indicating that only the well-heeled segments of society will be able to borrow from now on.