30 Jun 2020
UK mortgage approvals slumped to a record low during May as the COVID-19 pandemic took its toll on the housing market, according to data from the Bank of England.
The number of mortgage approvals fell to 9,273, the lowest number since comparable records began in October 1997, down from 15,851 in April.
New mortgage approvals collapsed by 90% compared to pre-pandemic levels and represent just a third of the lowest level seen during the 2008 financial crisis.
The data also showed a net repayment of consumer credit of £4.6 billion pounds in May as people remained largely stuck at home and spent less.
The Bank of England also reported a further big rise in the amount of money households and companies hold in their bank accounts, which increased by £52 billion.
Commenting on the data, Hina Bhudia, a Partner at mortgage broker Knight Frank Finance, said: 'The Bank of England data reveals the unprecedented impact of the property market shut down when many surveyors were unable to visit properties to conduct valuations in-person.
'Leading indicators suggest lending has been picking up since May, but it's clear there is still a long way to go before many borrowers experience anything resembling pre-pandemic conditions.'