Mortgage market will reach £220bn

Indeed, the mortgage brokerage expects the industry’s teething problems with MMR to be largely done with by the middle of the year.

Henry Knight, managing director of Springtide Capital, anticipates a surge in mortgage lending from the start of the third quarter, which could continue into the New Year.

He said: “The preparations for MMR are now out of the way and the consequent challenges from its initial implementation will be felt between now and the end of the summer.

“By the third quarter of the year, the situation will improve again as the lending appetite is still there and encouragingly, has not subsided in spite of the recent regulatory turbulence.”

But Jonathan Burridge, independent mortgage adviser, said: “By Autumn the industry will have some understanding of what needs to be addressed.

“I as a broker will understand what is required, while lenders will have a better gauge of whether we are meeting their expectations appropriately.

“But MMR took several years to come in and nothing is going to change overnight. Realistically we need to see what is right and what’s wrong.”

Knight explained: “As expected, many of the lenders are experiencing initial teething problems with the additional strain on internal resources, new IT systems and processes which are now in place.

“Application times are taking much longer at this time, as banks and building societies get to grips with the new environment post MMR. The good news is that we believe the situation will improve as the year goes on.”

Burridge shared Knight’s optimism, but he felt the £220bn figure touted for mortgage lending was optimistic.

He said: “It’s a higher number than other trade bodies are touting. I think it might be a little ambitious, but I’m busier than any point in the last three years.”

The broker expected only some the MMR teething troubles to be resolved by Autumn.

Burridge added: “There are thousands of customers who are potentially being disadvantaged because of lenders’ overzealous expectation of requirements from the FCA.

“There are also some significant problems about requirements for lending into retirement.

“Some of these problems might not be resolved by Autumn.”

Burridge was sympathetic with lenders in the wake of the FCA’s Lynda Blackwell stating that many have misunderstood parts of MMR at FSE Manchester.

He said: “When lenders are investing so much money into MMR, such as new IT systems, to be told you’ve misunderstood by the FCA has to hurt.”