Remortgage lending hit hardest by regulation changes

Adam Williams
Written By:
Adam Williams

Remortgage applications suffered most in the month leading up to the Mortgage Market Review regulation changes, figures released by the Mortgage Advice Bureau have shown.

The number of remortgages applied for in the month was 12% lower than the March figures while purchase applications were also down. Both were up on the levels recorded in March 2013, however.

The average value of a remortgaged property grew 6% in the month of April to reach £299,375.

As lenders prepared for the impact of the Mortgage Market Review on their direct channels the number of products available to brokers grew by 5% to hit 7,942. Meanwhile, the number of products in the direct channels fell by 2%.

Despite the rise of the Help to Buy scheme the average deposit needed to get onto the housing ladder continues to grow. In April the average buyer had a deposit of £65,150, up from £61,325.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “It’s a promising sign that confidence appears unshaken among younger borrowers. We have seen the average age of buyers seeking a mortgage slowly falling over the last twelve months, which is a symptom of greater opportunity and movement in the market.

“A degree of slowdown was inevitable in the run-up to MMR, particularly given the exceptionally busy start to 2014. With applications up 29% year-on-year, the mortgage market remains open for business and in far better shape than it was a year ago.

“MMR has made getting advice an integral part of securing a mortgage, and we are already seeing the consequences with a significant shift in the focus of new products from direct to intermediary channels.

“With lenders targeting different consumers and taking different approaches on affordability, seeking a view on products from across the market will become the best way to find one that suits your needs.”