Chart that tells a story - Mortgage Market Review

What does this show?

The data demonstrate lending to first-time buyers, remortgaging and buy-to-let lending in the run-up to, and following, the introduction of new rules on affordability under the Mortgage Market Review (MMR) in April last year.

The graph illustrates that over the past year the number of first-time buyers has fallen, remortgaging has remained pretty flat but buy-to-let lending has continued to grow.

Where is the data from?

It is produced by the Council of Mortgage Lenders, an industry body. The figures are for mortgages advanced during the month which means they reflect sales from some weeks or even months before. The figures run to February - the latest available data by mortgage category.

What does it mean?

The graph suggests that over the past year much of the steam came out of the housing market, with declines in both house price growth and mortgage lending. The stricter lending criteria introduced by MMR damped demand, ushering in a slower pace of purchase applications and reduced house price growth.

The cooling effect may not be permanent: this week the CML published gross lending figures for March, showing a 21 per cent rise on February and a 7 per cent rise on March 2014, to £16.5bn over the month. Estate agents said the regulation had nonetheless had a substantial effect on the property market.

Mark Hayward, managing director of the National Association of Estate Agents, said: "The new rules have led to two-thirds of NAEA estate agents reporting a decrease in the number of buyers."

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What is the MMR?

Introduced in April 2014, with 300-plus pages of detailed rules and appendices, MMR was intended to prevent the kind of irresponsible mortgage lending that characterised the market before the housing bubble burst in 2008.

Nigel Bedford, senior partner at broker Largemortgageloans.com, said that for many prospective first-time buyers and homeowners looking to remortgage, the rules meant the application process became longer, the questions more invasive and availability of products more restricted.

Why was there a blip in lending in January?

The start of every year tends to see a lull in the pace of house purchase lending - a trend borne out by the March bounce in gross lending. Mr Bedford says: "January and February tend to be the quietest months of the year for house purchases. This is because the market is seasonal, people don't want to be searching for a new property when it's cold and dark outside and it's Christmas time."

However, buy-to-let loans rose in January, up 12 per cent on the same period in 2014. Historically low rates make the market attractive to landlords. The category is also still classed as unregulated, meaning the full weight of MMR does not apply.

What don't the figures show?

David Hollingworth, director of broker London and Country, said it was hard to divine from the figures what is down to market changes and what can be blamed on MMR. "Certainly, the implementation of MMR saw more tweaks and changes to lender criteria but they had already been tightening up in anticipation of MMR."

He added that the fall in remortgaging could also be because buyers are choosing not to switch to a new lender when their current deal is good; others may be opting to move on to a new rate with their current lender.

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