To get a mortgage in the UK the summer will be more difficult

Among the British mortgage brokers and borrowers is growing concern about the new rules of mortgage lending that may affect the availability of mortgage lending in the UK.

The new rules, which should come into force two months provide for a more thorough check when reviewing applications for mortgage loans. The increase of skilled mortgage consultants, oddly enough, increases in the number of failures in connection with excessive scrutiny of applicants.

Announced changes aimed at a thorough assessment of risks, preparedness and responsibility of the borrower. The credit rating of the borrower is very important to evaluate its ability to meet credit obligations both in the short and in the long term.

The new rules include the introduction of the so-called stress test analysis, allowing to identify whether the borrower to repay its obligations on the loan in the event of a change of financial situation – for example, in the case of rising interest rates. In this regard, brokers believe that could increase the percentage of rejected applications.

Changes in legislation introducing stress tests should be introduced from 26 April 2014, however, tests are already being actively implemented and are being tested. In addition to skepticism about the stress tests of clients, there are technical and economic side. Introduction quite costly and will require a lot of funds for the implementation of new computer programs, with absolutely no obvious effect. In addition, overly complex procedure can cause confusion and inconsistencies in the law that will only worsen with respect to mortgage loan borrowers.

As you approach the entry into force of the new rules, it becomes obvious that compared to last summer to get a mortgage in the UK will be harder. Because the mortgage market is one of the main stimulating factors of the real estate market in the UK, it is clear that the slowdown in mortgage lending approximately by the summer of 2014 will reduce the pressure on the market from buyers and will be able to smooth the process of rising prices.

® Maxim Savitsky. 26.02.2014 g.

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