Mortgage approvals for house purchase plunged by 24 per cent from almost 74,000 in February to 56,200 in March, hitting their lowest level for seven years
The Bank of England data show that while purchase approvals have not fallen to this level since 2013, remortgaging was also down by 20 per cent to 42,551, the lowest figure since 2016
With other indices still reflecting pre-pandemic activity, the latest figures from the Bank of England are the first major sign of the impact of the lockdown on the housing market.
The rate on new variable-rate mortgage borrowing fell by 17 basis points in March following two emergency cuts to the Bank of England base rate, while the cost of fixed-rate mortgages was little changed
Knight Frank Finance managing partner Simon Gammon says: “The March data is showing the early effects of the outbreak on mortgage markets that had just a month earlier been at their most active in five years. “Unless the housing market recovers quickly with the necessary government support, we believe as many as 350,000 mortgages for house purchase, including 150,000 for first-time-buyers might no longer take place this year. “The scope of potential losses in tax revenue for everything from stamp duty to VAT raised from home renovations underlines how important the housing market is to the wider economy.
“The good news is mortgage lenders that had been in retreat a few weeks ago are starting to look beyond the lockdown. Banks are trying to re-establish their pipeline of new business by raising the loan-to-value ratios they will lend at, increasing the maximum loan sizes for which they will accept remote valuations and re-introducing products they had previously withdrawn.”
Article sourced from Mortgage Strategy website in an article on 1st May 2020 . Original full article can be viewed by clicking link below
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