MMR stifles March lending
The chartered surveyor records house purchase approvals of 65,498 in March 2014, 7% less than the 70,309 recorded in February.
This is the second consecutive month that purchase approvals fell, reversing the trend between February 2013 and January 2014 where lending levels increased from 52,537 to 76,753.
Richard Sexton, director of e.surv chartered surveyors, said: “Confidence is pervading the economy, but home lending has fallen back. Last month’s lending dip can be explained by the stormy patch of weather with which we welcomed in the New Year, but this isn’t enough to explain why lending fell further in March.
“Lenders are trialling their MMR ready systems in the run up to the full roll-out of regulation at the end of April. They are tightening up affordability checks, training staff and putting in place lengthier advisory processes. House purchase lending has dipped as a result.”
The Mortgage Market Review, which comes into play on April 26, will see affordability checks tighten up and the application process lengthen.
Lenders are already implementing changes to make sure they are compliant with regulation by the end of the month.
Despite the monthly dip, home lending is still significantly higher than last year, with 22% more home loans issued than in March 2013.