UK Mortgage Market Review (UK's equivalent of Singapore's TDSR)

UK's new Mortgage Market Review rules came into force on 26th April 2014.  What is this?  In short, it is UK's version of Singapore's TDSR. These measures were put in place to ensure that borrowers would be able to service their loan repayment obligations.

From the Financial Conduct Authority website, on top of giving evidence of income, mortgage applicants must provide documentation to show their level of spending. This will be spilt into three categories

Essential expenses
This is what you regularly spend on the things you cannot do without, such as:

food
household cleaning and laundry
gas, electricity and other heating costs
water bills
telephone
essential travel (such as travel to work or school)
council tax
buildings insurance (it is usually a condition of your mortgage that the building must be insured)
ground rent and service charges (for leasehold properties)

Basic quality of living costs
This is what you need to spend on occasional essentials, with some allowance for leisure costs, including:
clothes
household goods (such as furniture and appliances) and repairs
personal goods such as toiletries
basic leisure costs, including non-essential transport
TV licence
childcare

Repayments and other commitments
This covers other payments you know you will have to make, including:
debts you are paying off, like credit card bills, loans or hire purchase payments
child maintenance and alimony payments

Impact
This measure is expected to slow down, quite dramatically, the number of new mortgage approvals.  Going by Singapore's TDSR experience, I think the slowdown will indeed happen.

However, I think this step is very timely for the UK property market.  This will help prevent boom and bust cycles that have been rather common in the UK.  With the Mortgage Market Review mechanism in place, the lending market would be much more resilient.

Can You Get Out of TDSR?
Co-incidentally, the Singapore Business Times published a front-page article on how some Singaporeans are getting off-shore loans.   These days, we live in an international world.  Very interesting.

Do contribute your views in our new community forum here!

References
http://www.express.co.uk/finance/personalfinance/469365/New-Mortgage-Market-Review-tests-to-make-rules-even-tougher