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Mortgage approvals fall again


The number of mortgage approvals has fallen for the third consecutive month, according to the British Bankers’ Association (BBA).

Whilst approved loans peaked at more than 48,000 in January, this fell consecutively every month up until April 2014 when there were 42,173 approved mortgages.

However, despite mortgage approvals falling in numbers, the value of money lent to homeowners increased to 12.2bn, its highest level since August 2008. This suggests increased lending at the beginning of the year, with this cooling off in the early part of the summer.

Speaking in relation to these figures, Richard Woolhouse, chief executive of the BBA said the “housing market is mixed”.

He also said: "The value of mortgages taken out in April was the highest for six years. However, looking ahead, mortgage approvals have fallen three months in a row".

Mortgage Market Review (MMR)

According to the BBA, this drop off in mortgage applications could be a result of the Mortgage Market Review (MMR).

The MMR is a measure which has implemented stricter lending criteria where mortgage applicants now face questions about their lifestyle and spending habits. The reason these questions are being asked is in order to make sure they can afford their mortgage repayments in the long term.

Whilst the MMR wasn’t introduced until April 2014, many lenders started complying with the new rules in the previous months. Because of this, there may have been some “bunching” of mortgage activity at the start of the year where mortgage applications were rushed through to avoid the new rules.

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