The UK economic recovery is in full swing with fundamental data increasing in most significant markets and even more positive news coming out of the housing market.  The housing market is cooling off just slightly and the new mortgage rules are being pointed to as one of the main reasons why.  The new lending rules instituted a few months age require lenders to ask more questions in an attempt to gain full understanding of how a potential house owner is going to stay current with mortgage payments and then stay out of trouble for the long haul.  The primary reason for the lending rules is so the market does not return to the habit of irresponsible lending.

The rules were introduced under the Mortgage Market Review and are basically a new step to the process of applying for a mortgage or a remortgage.  The new step includes asking more personal questions about the spending habits of those in search of more money to purchase or remortgage a property.

Paul Smee, CML director general, commented on how the new rules are being viewed as a dampener within the lending process as opposed to hard brake.  He said: "We now feel confident that, as we would hope, the MMR effect is more gentle dampener than hard brake.

"As we recently suggested in our revised forecasts, lending levels should continue to increase modestly over the course of the year, driven mostly by house purchases but with remortgaging also recovering."

Remortgage lending remains slow although an increase of 1% took place month on month in June.