House lending bounces back after new rules

MORTGAGE approvals were on the rise again in June, according to figures released yesterday, following the onset of a new bundle of regulations earlier this year.

There were 43,265 mortgages approved for borrowers buying houses last month, according to the British Bankers’ Association (BBA). This is up from May’s figure, but below the average of more than 45,000 for the last six months.

The new set of regulations known as the mortgage market review (MMR) came into force at the end of April, and is credited with causing some of the slowdown.

Howard Archer of IHS Global Insight suggested there may be a backlog of applications caused by the new rules: “It is likely that many lenders had to adapt their procedures, such as introducing more rigorous interviews with prospective borrowers and checking facts. This likely delayed the processing of mortgages, and it could well take longer to process them going forward.”

Despite the rise in mortgage lending, net lending to firms is still on the decline, dropping by another £2.1bn according to the data.