Data gathered by Buyshares.co.uk shows that the United Kingdom mortgage approvals slumped by 71.76% between March 2020 and April 2020. The slump goes on record as the biggest in 27-years.
Economic outcomes of coronavirus result in approval slump
In March, the approvals stood at 56,160 and later dropped to 15,850 for April. The highest mortgage approvals for 2020 in the UK were recorded in February at 73,550, an increase of 3.75% from January’s figure of 70,890.
Between April 2019 and April 2020, the approvals dropped by 76.07%. In April last year, the figure stood at 66,260. In 2019 between April and December, the approvals remained constant with an average of 65,960.
The drop in approvals can be attributed to the coronavirus pandemic and new homeowners are set to feel the full impact. According to the Buyshares.co.uk research report:
“It is worth mentioning that although the Coronavirus significantly impacts the old healthwise, young people who are first-time employees and lowly paid have been impacted significantly financially. In this case, first time home buyers who are mostly young people are set to reduce.”
The Buyshares.co.uk data also overviewed mortgage approvals in the UK between January 1987 and April 2020. During the period, the approvals registered a slump of 86.61%, the highest in history.
In January 1987, the approvals were 118,400. The highest mortgage approvals were recorded in April 1988 at 151,500 before embarking on a downward trajectory to hit a low of 62,600 in December 1992. Another notable slump was recorded amid the financial crisis in February 2009 at 27,000. Over the last ten years, the highest UK mortgage approvals were in March 2014 at 76950.
Moving forward, the mortgage sector needs to focus on digital solutions since the virus curtails movement, something synonymous with approvals.