SALES NEWS: Mortgage approvals increase
July was the first full month in which lenders had to be fully compliant with the new MMR regulations. The introduction of more rigorous checks to the mortgage application process led to fears within the industry that the housing recovery would adversely affected. However, figures released by e.surv in August show that July 2014 was actually the strongest month for house purchase lending since 2007, with 66,279 new approvals and a 52% increase in high loan-to-value lending.
The data suggests that whilst the new MMR rules may have slowed the mortgage approval process down, they have not prevented lenders from giving approval. The July approvals were 6.9% higher than in May. One in five of the approvals was given to borrowers with a deposit worth 15% or less of their total property value, indicating a willingness by lenders to continue lending to high LTV borrowers. However, this may change in October when banks will be required to limit lending to buyers at income ratios of 4.5 or above to 15 per cent of the total number of mortgage loans.