Brokers say delays biggest post-MCD challenge

Delays to mortgage applications have caused brokers the most difficulty following the implementation of MCD, according to an MTF survey.

Related topics:  Specialist Lending
Rozi Jones
22nd July 2016
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"The MCD creates an opportunity and a challenge to both the mainstream and bridging finance markets, which both sectors seem more than well placed to face."

39% of the 101 brokers questioned said delays to attaining a mortgage caused the most difficulties since MCD, followed closely by 31% who blamed complications with new affordability models. Almost a quarter of brokers (22%) said changes in consumer buy-to-let rules had caused their business the most difficulty.

40% of brokers said borrowers looking to remortgage had been most affected by the new MCD rules, followed by landlords at 21%, low income borrowers at 17% and self-employed borrowers at 16%.

In the run up to MCD, many brokers feared the new rules would lead to a decline in loan volume, however only 15% of brokers surveyed said they had experienced an actual drop in business since it was introduced. 46% of brokers said they had experienced an increase in volume across the board, while 39% said volume remained the same.

Specifically, 62% of brokers questioned experienced a rise in bridging loan volume in the second quarter of 2016. No one questioned saw a decrease in bridging volume during the quarter.

43% of brokers surveyed said the new MCD rules have not improved the market, compared to 21% who said there was an improvement.

Tomer Aboody, Director of MTF, commented: “The results reflect the introduction of stricter affordability and stress testing, which may be leading to delays on mortgage applications. Equally, the introduction of the Consumer Buy-to-Let has led to a transitional period, during which brokers and borrowers alike become familiar and comfortable with this new regulatory class.

“The MCD creates an opportunity and a challenge to both the mainstream and bridging finance markets, which both sectors seem more than well placed to face.”

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