Mortgage lending in the UK has now entered a realm considered more challenging than before.  Last week the Central Bank place new restrictive caps on the amount of house mortgage loans that borrowers could obtain.  This will more than slightly affect the number of mortgages approved by the bigger, well-known banks like Lloyds, RBS, Santander, HSBC, Nationwide and Barclays.

These big banks will not enter a period in which they are suffering at all, just less busy compared to the old days which are still around now.  The big banks did double their gross mortgage lending from the period of 2011 to 2013.  Mortgage lending for the banks increased from slightly under £25bn to £50bn.

The Bank of England has placed caps on mortgage loans for lenders leaving more small banks opportunities to get new lending business.  New borrowers could be looking to smaller banks due to the amount of flexibility they can offer borrowers.  Borrowers not possessing the best credit history should consider smaller banks that may be able to offer different types of packages on mortgage loans.

The Central Bank chose to place restrictive caps on the amount of mortgage loans a lender can approve to help limit the possibility of too many house owners running into trouble as the term in their mortgage repayment plays out.

The mortgage cap placed on lenders will become active from October 1.  For those who are already house owners, remortgage deals are still in ample supply.  House owners who are in a variable rate deal should consider doing some research and applying for a remortgage deal before the interest rates have an opportunity to increase.