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Lenders expect approval rate to dip ‘significantly’ over the next three months

Lenders expect the proportion of mortgages approved to fall “significantly” in the third quarter, according to the latest Bank of England credit conditions survey.

The survey says: “Some lenders noted that changes introduced as a result of the MMR might reduce app-roval rates somewhat. In addition, some lenders suggested a tightening in lending standards on large loans with high LTI ratios may also push down their approval rate a little.”

Lloyds Banking Group and Royal Bank of Scotland have already capped LTIs at four times income for loans over £500,000.

Mortgage Advice Bureau head of lending Brian Murphy says: “There is a common consensus that mortgage approval rates are firmly in check as a result of the MMR and we must ensure activity is not dialled down so far that credit worthy borrowers are disadvantaged again.”

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