Latest housing index reports have shown a cooling down of the housing market and now mortgage lending is revealing the same.  According to the latest data from Nationwide, the largest building society in Britain, the three months to the end of June resulted in only £5.8 billion loaned to homeowners in comparison to £6.4 billion loaned at the same time last year.  Some of the cause in the lending slow down for mortgages is said to be due to the tighter restrictions on mortgage and remortgage lending.  With the new Mortgage Market Review (MMR), borrowers are required to share more intimate details than in the past about their spending and saving habits.  This is to assure that borrowers can indeed afford the mortgage loan in which they are seeking.  A stress test is also applied to determine if the loan will be affordable if interest rates increase.

While the MMR may have slowed down the market some, it is also thought that perhaps new buyers are choosing to wait out the market rather than pay inflated prices for property over what was available only month’s past.  House prices have risen considerably in the last twelve months alone and in comparison the increased cost with interest applied over decades can amount to quite a large amount of money.

Consumer patience and the MMR may have slowed down the demand in mortgage lending but should the warnings increase of an impending interest rate hike, it is thought that demand will rise.  In an effort to secure a low rate interest, many borrowers will be seeking to come out of the shadows and put forth effort to gain a cheap remortgage or mortgage deal before they disappear.