New data that the Bank of England has released shows that there was a steep fall in the number of residential mortgage loans approved in May, with the figure for that month being a record low.
The total number of loans to be approved during that month was 9,300, whereas April saw 15,900 approvals. The fall is even more dramatic in comparison with February, prior to the coronavirus crisis and the temporary shutdown of the housing market, as that month saw 73,700 mortgage loans approved. That is a percentage drop of 90% between February and May and highlights the impact of coronavirus.
The mortgage approvals for May add up to £1.9 billion, but again that is a very sharp drop compared with the £15 billion value of those in February. The Bank of England has stated that the May total represents one third of the dip experienced in the midst of the 2008 financial crisis.
There was also a drop in the number of remortgage loans approved in May, with these falling to 30,400, from 34,100 for April and 52,000 back in February. This marks a drop in value of close to £4 billion between February and May. There was some more encouraging news for the market though, as net mortgage lending rose slightly in May, to £1.2 billion.
While these statistics will be a concern for advisors, those who have a CeMAP qualification and evidence of continuous professional development will be best placed to weather the difficult period and help more clients with their loan applications.