“A fourth successive monthly rise in mortgage approvals suggests the high street banks have got to grips with recent changes to mortgage regulations. All the same, there were 5,000 fewer approvals in May than was the norm in the six months before the Mortgage Market Review (MMR) took effect¹. Clearly there is still some way to go before lending activity on the high street is fully restored.
“Looking ahead, our chief concern is that UK mortgage borrowers face another wave of changes headed their way in the shape of the Mortgage Credit Directive (MCD). The short term threat is that another transitional period will slow the applications process and reduce the industry’s capacity to lend.
“In the long term, extra layers of regulation threaten to squeeze more consumers out at the margins.² When the rules change so often, it is very hard to judge the right time to say ‘enough is enough’ before we are left with a far more subdued market than anyone intended. Balancing consumer choice and financial safety is a constant challenge, and the Bank of England should stand ready to act if the pendulum swings too far in either direction.”
¹ Seasonally adjusted mortgage approvals averaged 77,988 a month in the six months prior to MMR implementation in April 2014: 5,056 more than May 2015’s total of 72,932 approvals.
² IMLA’s latest research report, Regulatory layering — assessing the cumulative impact of new financial regulations , examines the impact of regulatory change on the UK mortgage market.
For further information please contact:
Andy Lane / Will Muir, Instinctif Partners
Tel: 0207 427 1422 / 29 / Email: email@example.com
Notes to Editors
The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership unites 43 banks, building societies and specialist lenders, including 16 of the top 20 UK mortgage lenders responsible for more than £180 billion of annual lending.
IMLA provides a unique, democratic forum where intermediary lenders can work together with industry, regulators and government on initiatives to support a stable and inclusive mortgage market. Originally founded in 1988, IMLA has close working relationships with key stakeholders including the Association of Mortgage Intermediaries (AMI), UK Finance and the Financial Conduct Authority (FCA).