Fear of rate rise affected mortgage levels in May

By Michelle Rock

The threat of an earlier than expected interest rate increase, as well as the stricter lending rules brought in with the Mortgage Market Review, resulted in a flattening of mortgage lending in the month of May says the Council of Mortgage Lenders (CML).

There was £16.5billion of mortgage borrowing in the month of May, which was largely the same as in the month of April, though an increase on the same month in 2013. The CML says that stricter lending criteria introduced in April, combined with recent rumblings from the Bank of England about a possible interest rate rise before the end of the year, has dampened enthusiasm among would-be mortgage borrowers. It has also been reported that some mortgage applicants who had received an approval in principle have seen a u-turn by lenders who rejected their application after applying the stricter criteria contained in the Mortgage Market Review.

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