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First-time Buyers

Mortgage lending rises to £16.6bn in April

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
21/05/2014

The prospect of the Mortgage Market Review (MMR) did little to slow down mortgage lending in April with

The new regulations hit the market on April 26 and some had feared lenders would rein in lending ahead of the implementation date.

However, the latest figures from the Council of Mortgage Lenders show the impending regulations did not cause a slowdown in the lead up to the MMR.

Gross mortgage lending was an estimated £16.6bn during the month, 36% higher than last year and the highest April total since 2008.

Lending was also over 8% higher than the March total of £15.3bn.

Henry Woodcock, mortgage consultant for Iress, said the full impact of the MMR would not be seen for several months.

“Today’s figures highlight the underlying strength of the mortgage market, but they must be taken with a pinch of salt,” he said. “The full effects of MMR won’t be felt in the monthly numbers until the end of May at the earliest.

“In fact, in the run-up to April 26, there was a concerted rush to secure and complete mortgage applications ahead of the changing regulation, accentuating the activity in the market.”

“The mortgage application process is lengthening, and in the short-term at least, this will likely dampen lending. However, that’s not to say it will derail the progress we have seen in the last year.”

CML chief economist Bob Pannell said: “The implementation of the Mortgage Market Review from late April has made it a little harder to interpret recent data. As we have pointed out previously, there may be some disruption to the monthly pattern of activity while MMR procedures bed down.

“The Bank of England has signalled that macro-prudential measures to limit the housing market upturn are likely in the near future, and possibly in the very near future.

“Forthcoming measures will, in our estimation, be careful, calibrated, and proportionate, and designed to reinforce prudent affordability checks, rather than to apply the brakes to the housing market in a more dramatic fashion.”