Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA) trade body, said big changes were ahead.

The EU mortgage directive will be implemented in the UK before March 2016 and Haresnape said the market should brace itself for a slowdown around that time.

“Looking ahead, our chief concern is that UK mortgage borrowers face another wave of changes headed their way in the shape of the mortgage credit directive,” he warned.

“The short term threat is that another transitional period will slow the applications process and reduce the industry’s capacity to lend.”

The Mortgage Market Review was implemented in April 2014 and another set of regulations has the potential to confuse customers, he said.

“In the long term, extra layers of regulation threaten to squeeze more consumers out at the margins,” he said.

“When the rules change so often, it is very hard to judge the right time to say ‘enough is enough’ before we are left with a far more subdued market than anyone intended. Balancing consumer choice and financial safety is a constant challenge, and the Bank of England should stand ready to act if the pendulum swings too far in either direction.”