Industry leaders have warned that mortgage approvals have dropped yet again for the third time in April. After its highest of 75,838 in January, the approvals have dropped to 62,918.
The fall in approvals has shown it is a result of the new Mortgage Rules that were implemented in April.
Richard Sexton, director of E.Surv Chartered Surveyors said: Borrowers must now prove that they can withstand potential interest rate rises up to 7%, as well as answering a host of detailed questions about future finances
The new rules, introduced by the FCA (Financial Conduct Authority), were created to make sure that borrowers are issued mortgages that they can afford.
Borrowers will now face in depth checks on their income and expenses to assess whether they can cope with the increase in interest rates.
These rules apply to new buyers as well as those looking to remortgage.
According to the Land Registry, the average house prices across England and Wales in April were 172,069, even with a monthly increase of 1.5% yet it is still lower than the peak of November 2007, which stood at 181,572.
Nick Marr, spokesperson for The House Shop says: The mortgage market review was bound to slow mortgage approvals down whilst lenders got to grips with the new rules. I can see that mortgage brokers will become more important in the mortgage approval process and that the sector will grow with the new regulations.