Remortgage applications were hit the hardest in the run up to April 26 when MMR went live, according to the April National Mortgage Index from MAB.But speculation about tightening criteri...

Remortgage applications were hit the hardest in the run up to April 26 when MMR went live, according to the April National Mortgage Index from MAB.

But speculation about tightening criteria did not appear to dissuade younger homebuyers. The Index showed the average age of buyers seeking a mortgage during April dipped below 37 (to 36.9) for the first time in almost four years, since September 2010.

Remortgaging limited to owners with more valuable homes

Data from over 550 brokers and 900 estate agents shows the volume of remortgage applications dropped by 12% in April, while purchase applications dipped by 7%. However, both purchase and remortgage volumes during April were still 29% higher than in April 2013.

Remortgage business was driven by owners with more valuable homes and greater equity to draw on. The average value of remortgaged property in April was up 6% from March to £299,375. The typical equity put forward jumped by 10% from £124,375 to £137,178.

There was less monthly change in purchase activity: the average buyer put forward a 6% larger deposit (£65,150, up from £61,325) and applied for 2% extra mortgage finance (£158,535, up from £155,833) to buy a home worth 3% more (£223,685, up from £217,158).

Product launches boost intermediary channel

Final preparations for MMR did not stop product numbers rising by 3% since March to 11,416: their highest point in 2014. This was despite a drop of 2% (-83) in the number of products available direct from lenders.

In a sign of the growing importance of the intermediary channel, broker products increased by 373 (5%) to 7,942.

The number of intermediary products has now increased by 646 since February while direct products have fallen by 171: a swing of 817 in total, equivalent to 7% of April's total product range.

Average fixed rates continue to rise

Using data from Moneyfacts.co.uk, the Index shows that average mortgage rates continued to rise in April as lenders adjusted their pricing to temper demand while they readied themselves for MMR.

Average five year fixed rates are now 4 basis points (bp) higher than they were twelve months ago (4.04% vs. 4.00%). Average two and three year fixed rates both rose between March and April, but remain 18bp and 20bp lower than twelve months ago.

Brian Murphy, head of lending at Mortgage Advice Bureau, confirmed that it's a promising sign that confidence appears unshaken among younger borrowers.

"We have seen the average age of buyers seeking a mortgage slowly falling over the last twelve months, which is a symptom of greater opportunity and movement in the market. A degree of slow-down was inevitable in the run-up to MMR, particularly given the exceptionally busy start to 2014. With applications up 29% year-on-year, the mortgage market remains open for business and in far better shape than it was a year ago.

MMR has made getting advice an integral part of securing a mortgage, and we are already seeing the consequences with a significant shift in the focus of new products from direct to intermediary channels. With lenders targeting different consumers and taking different approaches on affordability, seeking a view on products from across the market will become the best way to find one that suits your needs.”