How will new mortgage rules affect potential homebuyers?

Mortgage Market Review rules will mean changes to the application process

Homehunters are becoming more concerned over their chances of putting together a deposit and getting a mortgage, according to new figures from the Building Societies Association.

Its survey indicates that 63 per cent of people are worried about deposits, the highest for two years. Just under a third are also mindful of the effects of possible interest rate rises - 14 per cent say that a one per cent rise would make mortgage repayments  difficult, although 42 per cent say that they would not be badly affected.

"The new lending rules, known as the Mortgage Market Review will be introduced on 26 April, and some lenders have already begun to implement these rules," said BSA Head of Mortgage Policy Paul Broadhead. "The process of getting a mortgage is changing, but borrowers should not be put off by the new regime.

"All applicants, bar a very few specific groups, will receive mortgage advice. While this means that the mortgage application process will take longer than before, consumers will benefit from the advice on what is probably the biggest purchase of their lives. Similarly applicants should expect to provide more details of their income and expenditure.

"A new feature is the requirement for a lender not only to establish that a borrower can afford the loan at the current interest rate, but also if the rate were to rise. Overall, while some people may not be able to borrow as much as they expect it does not mean that those on lower incomes or those with smaller deposits will be frozen out of the property market. What it does mean is that lenders will continue to take a common sense approach to mortgage lending."

A spokesman for the Financial Conduct Authority said: "We are taking a common sense approach to mortgage lending to help protect against the bad practices in the run up to the financial crisis that saw people get mortgages they simply couldn’t afford. Under our new rules, anyone that can afford a mortgage will be able to get a mortgage."

Paul Smee, director general at the Council for Mortgage Lenders added: "The introduction of MMR regulation will bring the largest change to how the mortgage market works in over a decade. The industry has shown that it is ready, and we anticipate a smooth transition into the new framework. We hope and expect the new rules will provide a robust and stable framework for the long term."

Discover more property articles at Homes and Property
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: SEO Manager

£25000 - £28000 per annum: Recruitment Genius: They are looking for a white-ha...

Recruitment Genius: Operations and Administration Support Assistant

£16000 - £18000 per annum: Recruitment Genius: One of the UK's leading Solar P...

Recruitment Genius: Customer Support Specialist

£18000 per annum: Recruitment Genius: This organisation is changing the way at...

Recruitment Genius: Digital Web Designer

Negotiable: Recruitment Genius: A Digital Web Designer is required to join a f...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor