Mortage approvals fall

There were 70,309 approvals last month, down from 76,753 in January. The figure was last lower, at 67,845, in October.

Analysts said the decline was likely to be temporary - and possibly caused by the wet weather - but it may ease fears that the housing market is spiralling out of control.

The figure was an 8% fall on the previous month, but still 46% up on the same month in 2013, when the number stood at 52,537.

Ed Stansfield of Capital Economics said: "Although likely to be temporary, today's sharp fall in ortgage approvals should go some way towards calming fears that the housing market recovery is rapidly spiralling out of control."

He said it was hard to find an obvious trigger for the fall, given the improving economic picture, including jobs and earnings data.

"It may, therefore, be an early sign that pent-up demand released by the launch of Help to Buy and the broader economic recovery is being exhausted.

"Nevertheless, with the economic recovery likely to strengthen and the recent Help to Buy extension set to underpin demand, approvals are likely to rise further over the next few months, although perhaps at a slower rate than in the past six months."

Howard Archer of IHS Global Insight said: "It is highly likely that mortgage activity was held back in February by the very wet weather, so the slight dip in approvals does little to dilute the view that the housing market is currently sustaining robust momentum."

** People applying for a mortgage face more probing questions into their spending habits when the biggest shake-up of the market for a decade comes into force in three week's time.

Toughened industry-wide rules means that from April 26, mortgage providers will take a keener interest in an applicant's outgoings, which could include what they spend on childcare, clothes, phone bills, hobbies, travel and season tickets, in order to work out whether or not they can afford their home loan.

Experts suggested the new mortgage market review (MMR) rules could also lead to some lenders tweaking their rates upwards slightly in order to manage a slower flow of applicants while they get to grips with the changes, while some borrowers could also find themselves offered smaller loans than they were expecting.

The crackdown aims to ensure there is no return to irresponsible lending and that people can only take on mortgages they can pay back and not debts which depend on house prices rising in order for them to be repaid successfully.

There are more than 11 million mortgages in the UK and the rules will also mean that lenders have to apply a "stress test", to ensure the loan would still be affordable if interest rates rose and the borrower's regular repayments were higher. More emphasis will also be put on the impact of known future life changes on the horizon such as retirement or redundancy.

Paul Smee, director general of the Council of Mortgage Lenders (CML), said the changes will bring about "the largest change to how the mortgage market works for a decade".

He said: "The industry has shown that it is ready, and we anticipate a smooth transition into the new framework."

The new rules have been anticipated for several years and much of the MMR has already been incorporated by lenders.

But the CML said that borrowers will find that procedures for giving advice will be more detailed. It has been estimated that an advised sale could take up to two hours or longer to complete.

Firms will need to ask more questions to find out more about a borrower's circumstances, so mortgage interviews could take longer and could be split into two interviews instead of one.

Lenders will have to find out more about how a borrower spends their money, including regular outgoings and payments on loans and credit cards.

Borrowers may find they need to produce more paperwork to back up what they say about their income or spending.

Documents they may need to substantiate their income include evidence of overtime or bonuses not captured on payslips, statements from employers verifying any irregular income and statements of income from investment or rental properties.

The changes will not only affect buyers but people looking to remortgage. People wanting to make changes to their existing mortgage may be required to go through an advised process and a new assessment to check whether their payments will be affordable.

Interest-only mortgages will still be offered, but they are likely to remain considered a "niche" product and customers will have to show they have a credible strategy in place to repay the loan when it comes to an end.

Last summer, regulator the Financial Conduct Authority (FCA) issued a "wake up call" to interest-only mortgage holders amid fears that up to 1.3 million customers do not have enough cash to pay their loans back.

Interest-only mortgages, which allow borrowers to pay off the capital only when the mortgage term ends, have become much more thin on the ground in recent years amid concerns about people not being able to repay their debt.