There was a drop in the number of mortgages granted to potential homeowners over the summer, this being the first drop in the rate of mortgage lending for more than two years in the UK.
It is thought that this drop could have been caused by a ‘bottleneck’ effect from the new affordability regulations that came into effect earlier this year, meaning that more applications were being rejected, and less were being processed because of the increased workload of adhering to new the new rules.
However, it is thought that this is only a temporary lapse in the third quarter of the year, and it is expected to pick up again, as the banks become more accustomed to dealing with the extra regulations.
These regulations were thought to be very intrusive when they were announced and sought to restrict lending to people who would not be able to afford to repay by checking how potential borrowers spend their outgoings each month.
Even as the banks become more accustomed to dealing under these new regulations, it is thought they may lower prices on mortgages until the end of the year in a bid to attract as many customers as possible, increasing the amount of applications once again.
However, interest rates are expected to spring back up at the start of next year, and so we may see falling numbers again in 2015.
How this will affect Help to Buy schemes is not clear, but it could be that banks and building societies will be less likely to approve them if the mortgage sector begins to get a bit tight over the next year, as increased interest rates will surely put a lot of first time buyers off.