New lending rules slightly affected the real estate market in the UK

The new rules of mortgage lending to homebuyers who in April 2014 was introduced in the UK, had a very weak effect on the process of lending. Anyway, they did not cause such a dramatic effect, which was predicted by some experts. This conclusion was made by the Council of Mortgage Lenders in the UK for the results of the may market survey.

The number of loans to those people who are buying their first home, increased in May by 9% compared to April 2014 was 19% higher than in may 2013. And the volume of credit – size of mortgage loans is 11% higher than in April and 30% higher than in may last year.

The total number of people who changed their place of residence with a mortgage, including those bought not first their homes increased in may by 8%, while volumes increased by 21% compared to may of last year.

The figures on lending , however, is not so sanguine – a lending fell in may by 18% compared to April 2014, compared with may of last year – the size of lending fell by 15%.

Another type of lending – lending to investors to “Buy to let” – that is, investors buying property to rent. In this sector also there has been a slight increase in the size of the credit compared to April 2014 in may. Compared with the previous year increase in lending is quite substantial: 14% by number of loans and 22% by volume of the allocated funds.

Interesting data presented on the availability of loans obtained by buyers. Thus, on average , buyers who bought their first home, were given loans that amounted to an average of 3.43 annual income of their family. In may 2014 it was £123000, and in April £121500. The size of the average annual family income has not changed and amounted to £37000 pounds for a family.

Thus, low interest rates on mortgage loans and state financial aid programs the residential property market became the main driver pushing the real estate market is the UK, where there has been a steady growth. May 2014 was the first month where the act of new lending rules and he showed that, although the market is still far from full recovery from the crisis, all the signs of improving market there.

® Helen Antre 08.07.2014

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