Covid-19 mortgage approvals 50% below financial crisis numbers: BoE

The number of mortgage approvals for house purchase fell to 15,800 in April, around 80% below the February level, according to the latest Money & Credit statistics from the Bank of England.

Related topics:  Mortgages
Rozi Jones
2nd June 2020
Bank of England BoE
"April saw a major shift towards refinancing as lenders and advisers adapted to the constraints presented by the coronavirus outbreak."

The Bank says April's total was around "half the number of approvals as the trough during the financial crisis", and the lowest since the series began in 1993.

Approvals for remortgage with a different lender have fallen by less, to 34,400, 34% lower than in February.

Lending also fell sharply in April. Gross new mortgage borrowing fell to £14.4 billion, 38% lower than in February. Repayments on mortgage lending also fell sharply, to £13.9 billion, 26% lower than in February. This reflects a sharp fall in full repayments of loans, as well as the effect of payment holidays.

The sharper fall in gross lending than repayments means that net mortgage borrowing fell, and was only £0.3 billion in April compared to an increase of £4.3 billion in February. This is the lowest net increase since December 2011.

David Copland, director of mortgage services at TMA, commented: “April saw a major shift towards refinancing as lenders and advisers adapted to the constraints presented by the coronavirus outbreak. However, it’s been encouraging to see advisers once again focus on incoming applications, as well as cases which were previously on hold, since the housing market reopened for new business.

“However, as the focus on new business resumes, it will be crucial that brokers do not lose sight of their existing clients. Now is the time for advisers to be keeping in touch with current clients and reviewing any change in their circumstances – particularly if they have been impacted by the pandemic. Technology will go a long way towards helping brokers to do this, ensuring they can easily keep on top of their client portfolios and better support customers, both current and new, during this uncertain time.”

More like this
Latest from Property Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.