The number of mortgage loans has risen in the UK despite the rules rolled out by the mortgage market review (MMR) in April, according to lenders.
Paul Smee, director general of the Council of Mortgage Lenders (CML), commented: "With May lending figures, we get our first glimpse at the effect the MMR has had on lending trends and, at least so far, the impact appears subtle, rather than dramatic."
Go deeper with GlobalData
According to the CML, the number of loans to first-time buyers rose by 9% in May 2014 compared to April and was 19% higher than in May 2013.
By value, lending to first-time buyers was up 11% on April and 30% higher than May 2013. The number of loans to homeowners moving house also rose up to 8% from April to May 2014.
"First-time buyers and home movers continue to be key drivers in market growth and their activity does not seem to have been noticeably disrupted," Smee added.
The MMR rules that came to force in April were designed to make it harder to take out a mortgage, with borrowers being asked to give more detail about their spending.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe buy-to-let sector, for which the MMR rules don’t apply, also continues to perform well, according to Adrian Anderson, director of mortgage broker Anderson Harris.
"Over the past couple of months in particular, lenders have been channelling their energies into buy-to-let, improving rates and easing criteria.
"Over-onerous rules, such as borrowers having to be experienced landlords or earning significant minimum incomes have eased a little, making buy-to-let an even more attractive investment," he said.
However, Anderson said the impact of the new rules was "too early to call". "While some lenders were MMR-compliant ahead of the official launch at the end of April, using May data to assess the impact of the new rules is perhaps premature.
"People are still able to take out new mortgages and to remortgage but it is taking longer, and borrowers may find they have to compromise in terms of rates and loan-to-value," he said.
In recent mortgage loans news, Royal Bank of Scotland (RBS) – which holds 8% of the mortgage market – has announced it will be offering "loans within minutes" as part of a £1bn ($1.7bn) investment in its high-street business.
With the move, RBS hopes to sell more home loans and to challenge Britain’s payday lenders, although the bank precised that it will not offer the kind of smaller loan sums available from those firms.
Related articles:
RBS to challenge payday lenders by offering "loans within minutes"
Tougher mortgage rules come into force in the UK
New mortgage rules could mean bigger loans for UK consumers
