Mortgage lending rockets by 37% in 2014

Mortgage lending rockets by 37% in 2014 ahead of tighter rules which come into force in nine days
In the first quarter of 2014 , £46.3bn has been borrowed for mortgages
but tougher borrower checks by lenders will happen from 26 April

Mortgage lending in 2014 has been far stronger than last year with £46.3billion being advanced to borrowers in the first three months, 37 per cent higher than the same quarter in 2013.
The healthy figures from banks and building societies in the monthly Council of Mortgage Lenders (CML) report further suggests housing market confidence is strengthening.
Last month, lending was a third higher than March 2013, with an estimated £15.4 billion worth of mortgages being advanced. The latest figures are also a 4% increase compared with February.
Mortgage lending: Since the beginning of last year, mortgage lending has rocketed.
But while the quarterly total for lending was 37 per cent higher than the same quarter last year, the total is 10 per cent down compared with the last quarter of 2013.
That period saw the full launch of the Government’s flagship Help to Buy scheme, which offers a helping hand on or up the housing ladder for people with five per cent deposits. An incentive greatly needed.
Lenders have been preparing for tougher mortgage lending rules which are set to come into force towards the end of this month.
From April 26, the new Mortgage Market Review (MMR) rules will mean lenders have to investigate mortgage applicants’ regular spending on outgoings such as childcare and household bills more thoroughly. They will also have to apply a ‘stress test’ to make sure the borrower could still afford their repayments if interest rates start to rise, but the CML say so far there are no signs this is causing disruption.
Concerns have been growing as the housing market picks up. Demand from would-be buyers is increasing at a faster pace than the supply of homes, which is putting an upward pressure on house prices and making them less affordable.

The Office for National Statistics have reported earlier this week that property values have leapt 9.1 per cent year-on-year in February to a new average high of £253,000.In London, they recorded an annual rise of 17.7 per cent.
It has been reported that The strength of house prices is not yet a serious problem outside London and housing market activity is still not unduly strong compared to long-term norms, so in these respects it is premature to talk of a general housing market bubble.Nevertheless, the risk of an overall housing market bubble developing is very real as the strength in house prices is becoming more widespread.
Borrowers need to be ‘vigilant’ about the possibility of interest rates rising as the economy continues to improve.
‘Ensure you don’t over stretch yourself and take on a bigger mortgage than you can afford to pay. for example. if rates rise, you would struggle with your mortgage, then opt for a fixed-rate.