MMR stalls Spring market
This continues the trend at the beginning of 2014, as purchase approvals have fallen by 17% in the last three months.
There were 13,000 fewer monthly home loans in April compared to January.
Approvals are still 15.3% higher compared to the same month last year.
Richard Sexton, director of e.surv chartered surveyors, said: “Borrowers must now prove that they can withstand potential interest rate rises up to 7%, as well as answering a host of detailed questions about future finances.
“But the slowdown has also come from the supply side. Lenders have invested time training staff and implementing lengthier advisory meetings, which has capped their capacity to process applications.
“It has led to an interim lending lull. But this is more than made up for by the benefits of the new system: ensuring lending is sustainable and borrowers can afford their repayments even when the base rate begins rising.”
He added that the Bank of England’s stress testing of the top eight lenders could cause a further slowdown in the market, as lenders have to make certain they can withstand a 35% fall in house prices.