March gross mortgage lending increased by 4% and the first quarter of the year had an impressive increase of 37% compared to the first three months of 2013.  There was an estimated £15.4 billion advanced to homeowners for remortgages and to new homebuyers in March.  This was a slight increase over the £14.7 billion recorded for February.  Overall gross lending grew to £46.3 billion for the first quarter which was decline on the previous quarter.

Mortgage and remortgage lending is expected to lack the same level of demand after the Mortgage Market Review (MMR) takes hold in the end of the month on 26 April.  The new regulations will require borrowers to prove their ability to afford loans through supporting paperwork and be able to pass a financial stress test should interest rates increase.  The measures have been put into place to help borrowers avoid financial trouble that would come with taking on a mortgage they cannot afford.

Bob Pannell, the Council of Mortgage Lenders (CML) chief economist, remarked, “Alongside benign developments in the wider UK economy and the labour market, housing market sentiment continues to strengthen.

“There are currently no signs of significant market disruption arising from the imminent application of new lending rules associated with the mortgage market review. While some mortgage lending indicators have eased back gently, this is from the very high levels of recent months.”

Andy Knee, chief executive of LMS mentioned a slowdown in the lending market, saying, “The new MMR regulations coming into play later this month may put the brakes on and curtail lending.

“New buyers are likely to feel the effects the most, with stringent new checks and rigorous measures meaning even the most careful savers could face delays in stepping on to the property ladder.”