With borrowers facing inquisitive questioning as to their spending habits when seeking a mortgage or remortgage, it is expected that lending levels will reflect the impact of the guidelines put into place to make borrowing more responsible.  The Mortgage Market Review (MMR) is expected to help those that cannot afford a loan to be discovered before they take on debt that cannot be repaid.  Borrowers will have to share their spending habits and saving habits along with their income information to gain approval from lenders.  A stress test will also be applied to the applicant’s financial information to determine if the loan is affordable when interest rates increase.

The Mortgage Advice Bureau (MAB) reported that in April the average buyer looking for a mortgage actually dropped to 36.9 years old which is the youngest average age since September 2010.  This could indicate that the MMR is not keeping young first time buyers away from the housing market.  First time buyers have just recently returned to the property ladder which has contributed to the stronger house prices being reported in the past few months.

Brian Murphy, head of MAB lending, said, “It’s a promising sign that confidence appears unshaken among younger borrowers.

“We have seen the average age of buyers seeking a mortgage slowly falling over the last 12 months, which is a symptom of greater opportunity and movement in the market.”

The MMR does seem to have impacted those seeking a remortgage.  Homeowner applications fell by 12% in April but there was an increase in the value of remortgaged property of 6% in comparison to the previous month at a level of £299,375.