Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“After several months of growth, the mortgage market is currently operating at a more regular pace with lending activity holding steady in May. Although we’re yet to see the full impact of the Mortgage Market Review (MMR), it appears to have taken some heat out of the market and set mortgage lending on a steady course.
“Affordability is hardwired into the mortgage market more than ever before, meaning that only consumers that can demonstrably afford their repayments both now and in the future will be granted a loan, minimising the chance of financial difficulties further down the line. We have already seen a noticeable impact on the typical mortgage applicant, with average deposits rising along with buyers’ incomes between April and May while the average loan to value (LTV) fell.*
“With MMR already introducing a more stable tempo to the mortgage market, the government should resist making any rash decisions in a bid to tackle rising house prices. Only time will reveal the true shape of the mortgage market once the new rules have bedded in, and now is not the time to impose limits on lending: doing so could effectively clip the wings of the market before it has had a chance to fully recover.”