Is the property market beginning to ‘moderate’ itself?

According to Nationwide, there is evidence that the property market is moderating itself, due to the introduction of new mortgage lending regulations. A decline in property prices can be seen in May which stood at 0.7% – an improvement from 1.2% in the month of April.

The new mortgage procedure includes a thorough assessment of potential mortgage-holders’ income and expenditure to decide how much they are capable of borrowing, whilst also taking into account present and future interest rate rises. As a result, it has become harder for people with insufficient financial backing to obtain large sized mortgages, leading to a 17% decrease in mortgage approvals.

These observations have come amid the European Commission and Bank of England’s propositions to curb the UK’s help-to-buy scheme, in an effort to reduce the risks related to high mortgage debt. However, the figures demonstrate that instead of reining in the scheme altogether, increased mortgage checks are sufficient in moderating the property market.

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