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Mortgage lending plummeted 90% from February to May

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Approvals for mortgages have fallen to a record low as a result of the coronavirus crisis and lockdown
Mortgage lending plummeted 90% from February to May

The number of mortgage approvals for house purchases fell to a new low in May of 9,300, according to figures from the Bank of England.

This was almost 90% below approvals in February and around a third of the trough during the financial crisis in 2008.

Approvals for remortgages with a new lender also fell, to 30,400, which was 42% lower than in February.

Paul Stockwell, chief commercial officer of Gatehouse Bank, said: “The property portals are reporting strong demand since the market re-opened in mid-May. However, time will tell whether the pent up demand will come to fruition.

“June will be the first full month of property transactions since the UK went into lockdown and it will be these figures that will be hotly watched as a measure of how determined buyers and vendors who returned to the market have been.”

Andrew Montlake, managing director at mortgage broker, Coreco, added: “There has certainly been a pick-up in demand from borrowers in June, while lenders have also started to get back into the rhythm of lending, albeit, understandably, with an increased sensitivity to risk.

“We remain for now in an artificial environment created by the Government’s furlough scheme. When this is slowly withdrawn, we will see the full impact on confidence, among borrowers and lenders alike.”

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