Mortgage approvals fall to lowest level in 7 years

Mortgage approvals for house purchase fell to 56,200 during March, their lowest level since March 2013, new statistics published by the Bank of England (BoE) have revealed.

The bank suggested evidence of a decline in housing market activity had started to become apparent in the March mortgage approval statistics, which fell by just over 20%.

The BoE data also indicated that approvals for remortgage fell 20% to 42,600, the fewest since August 2016, while ‘other’ approvals – which includes for withdrawing equity – fell back 17% to 12,000.

Mortgage borrowing, however, picked up a little in March, with a net increase of £4.8bn, and the BoE revealed the annual growth rate also rose a little to 3.6%. The bank suggested that mortgage borrowing tends to lag approvals, however, so this strength was “likely to reflect strength” in approvals in previous months.

Commenting on the BoE’s latest update, Phoebus Software sales and marketing director, Richard Pike, said: “After the start we had to 2020 the whole market was buoyant and looking forward to the potential of a return to pre-financial crisis activity.

“No one could have predicted what came next, and as we can see from the March figures, the effect of the coronavirus outbreak started to be felt almost as soon as the lockdown was implemented. Despite the fact that many of the housing transactions being reported in these figures, were in the pipeline up to three months earlier, it is evident that the lockdown caused some to be stalled.

“The hope is that the transactions that are waiting in the wings will be completed once the crisis is over, but we have to be prepared for some to fall by the wayside. We are likely to see an element of caution creep back into the market and fears over affordability, with many people seeing a real knock to their finances, cannot be ignored.
 
“Nonetheless, we are hearing more positive comments from the government that it is planning an easing of the current measures. Whilst in our own market, we are already hearing brokers reporting an increase in new-build enquiries. So, perhaps this heralds the return of at least a little confidence.”

    Share Story:

Recent Stories


Conveyancing Transformation
Adam Cadle talks to ULS technology CEO Jesper With-Fogstrup about making home moving a pleasant experience

FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.