As expected, the UK mortgage approvals are down with a significant number. The responsible cause is well-known; yes, the covid-19 pandemic is making everything difficult. With many constraints on home buying, for example – ‘only those that are not positive with the coronavirus, will be able to proceed with the application procedure’ is the reason behind the leaner market growth.
The substantial burden of household expenses has made it impossible for people to keep their savings aside for the mortgage thing. According to a report, the collective repayment of consumer credit by the households in March is £3.8billion.
Due to the income stability issues caused by the prevalent unemployment, the demand on the deposit size is more significant. This is sure to show the effect on both the ends. It means that both the borrowers and the lenders have suffocated chances to move forward in the mortgage procedures.
According to the figures issued by the bank of England, 56161 mortgages were approved in March. It is 24% lower since 2013 when there were 54,341 approvals. Virtual viewing of the properties is available, but this is not sufficient to satisfy the borrowers.
This is the reason; they do not want to take their next step in the mortgage formalities. Until the buyers do not visit the properties, they are not in a position to accept any offer from the lenders. In such situations, bad credit mortgage applicants are obvious to remain slower than ever in the application process. After all, they are already in a poorer condition than the applicants with good credit rating.
Remortgage approvals too are on the downside. Here also the drop is 20% that gives a demoralizing figure of 42600. It is the smallest number to be recorded since August 2016.
Not every news is bad news
Yes, the mortgage market in the UK is indeed going through a bad phase, as the Corona is in no mood to let the normalcy come back so quickly. But some good signs say that the conditions are not entirely hopeless.
Despite the big chaos and the low lending market, lenders have not cancelled or withdrawn most of the deals. Until the applicant does not belong to an industry, which is intensely affected by the virus effect, the lenders are ready to give approvals.