New FCA mortgage market rules not hitting lending says CML
New mortgage market rules imposed by the financial regulator have not had any major effect on the the market so far, with the number of first time buyers registering a strong increase even as affordability continued to worsen.
The Council for Mortgage Lenders (CML), the trade body of banks and building societies, said the Greater London market grew in both house purchase and remortgage activity compared to the previous quarter and the same period last year.
Regional data from the CML also showed first-time buyer growth in Wales and Northern Ireland, while remortgages declined in Scotland and rose significantly in Northern Ireland.
The Financial Conduct Authority, the UK financial regulator, introduced new rules in April that meant most people will get help from an adviser before taking out a mortgage and required borrowers to have a stronger idea of whether they can afford their mortgage at present and in the event of future interest rate rises.
New CML data on the characteristics of lending in Greater London for the second quarter of the year showed the number of first-time buyer loans was up 4% to 12,300 in the second quarter - 17% up on the same period the year before.
First-time buyers in the period borrowed £3bn, which was up 10% on the previous quarter and 27% year-on-year.
CML director general Paul Smee said the new FCA mortgage market rules "do not appear to have hindered the market, although the full effects of the new rules may take some time to emerge".
Home mover affordability worsened during the period, with home movers typically borrowing 3.66 times their gross income compared to 3.60 in the first quarter and the 3.09 in the UK overall
Smee expressed concern that trends in affordability seemed to be tightening, which was a particular challenge in London.
Home-mover loans were up 1% on the previous quarter and 7% year-on-year, while remortgage lending also showed growth in London month-on-month and year-on-year.
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