Mortgages in the UK collapsed in May according to new data compiled by the Bank of England. It appears the effects of the pandemic have wreaked havoc on the property market, and the plans of buyers across the country. Only 9,273 mortgages were approved in May 2020, in a sharp decline for accepted loans.
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In the previous month, 15,851 mortgages were approved, but even this fell short of the expectations of economists, who had hoped to see a recovery to 25,000.
The data also revealed how mortgage approval ratings had changed over time.
Analysis proved the recently recorded numbers were some of the worst ever noted by the central bank.
The May 2020 approval rating was 90 percent worse than in February, but also at the lowest level since records began in 1997.
Furthermore, the recent records stood at approximately a third of the lowest point seen in the financial crisis of 2008.
A whole host of mortgages have been pulled from the market in recent weeks and months, as a result of the pandemic.
Banks and other familiar providers have appeared to be reticent to offer loans to buyers, particularly in these challenging financial circumstances.
And many Britons who are looking to take out a mortgage have reported being asked to put down a higher deposit to secure their desired property.
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It is thought the lower approval rating could be a result of the property market freeze due to lockdown measures first introduced in March.
The government put a block on all but essential house moving, and estate agents were forced to shutter.
However, as lockdown began to ease, the government gave the green light for the property market to re-open in England.
In mid-May, estate agents were permitted to reopen, and viewings were allowed to be carried out.
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However, this had to be done under strict social distancing and health and safety rules.
At the time, the Housing Secretary, Robert Jenrick said the move to kick-start the market was necessary.
He said: “Our clear plan will enable people to move home safely, covering each aspect of the sales and letting process, from viewings to removals.
“This critical industry can now safely move forward, and those waiting patiently to move can now do so.”
The other three corners of the UK, however, have been more tentative with taking steps to return to normality.
In Northern Ireland, ministers only felt comfortable to reopen the market in mid-June.
The Welsh property market only saw a partial reopening last week at the request of First Minister Mark Drakeford.
And it was only yesterday that Scotland’s property market was tipped to reopen “with a bang”.
It is hoped mortgage applications, and the market as a whole, will soar due to the temporary delays now lifted.
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