Tuesday, January 20, 2015
The MMR Effect
"Tighter lending criteria, which came as a result of the Mortgage Market Review, may also play a part in stifling the lending boom. In fact, one of the reasons for rock-bottom rates late last year was not just that expectations of a Bank of England base rate rise were put back but also because lenders were behind on their targets, which led to a price war to drive business." MMR is a nostalgic return to the lending criteria of the '70s. Way back when average prices were 3xEarnings. Forget supply and demand, the real driver of prices is, and always has been, easy credit, and MMR has placed firm limits on it.