Mortgage approvals slumped to the lowest on record in April as the UK spent the month in the coronavirus lockdown, the latest data from the Bank of England shows.
The number of mortgage approvals fell from 56,136 in March to just 15,848 in April, which is the lowest level since comparable records began in October 1997.
Matthew Fleming-Duffy, a director of the independent mortgage broker, Cherry Mortgage & Finance, commented: “Lockdown switched the mortgage market off overnight and so April’s drastic drop-off in approvals and lending comes as no surprise.”
The ability of surveyors to once again conduct physical valuations has boosted confidence in lending and a number of lenders are now back to offering buy-to-let mortgages at up to 80% loan-to-value.
Fleming-Duffy added: “While we cannot expect a full-throttle response to new mortgage lending until global economies settle into a new normal, the UK remains one of the most densely populated countries in the world and it has a very evolved and dynamic mortgage market."
Since the lockdown was eased in mid-May many mortgage brokers have seen a sharp increase in enquiries, “reflecting the significant pent-up demand in the market right now”, according to Andrew Montlake, Managing Director at the UK-wide mortgage broker, Coreco,
He said: “There is definitely more caution among surveyors but for now valuations are holding up fairly well given the strength of demand.
“Everyone is watching the economy and trying to predict how it will fare in the months ahead as the furlough scheme is gradually unwound.
“Whether valuations stay firm or collapse will depend on how the jobs market holds up during the summer and Autumn.
"Right now, with the economy propped up by the furlough scheme, we are feeling our way in the dark."