Bank of England mortgage figures take an unsurprising tumbleMake Text Bigger
The Bank of England have released their money and credit statistics for April: Click here. Unsurprisingly, weakness in the housing market caused by the pandemic emergency resulted in a tumble in April’s mortgage market activity figures.
The number of mortgage approvals for house purchases fell 80% below the February level to 15,800 ( see chart 4). This was around half the number during the peak of the credit crisis, and the lowest since statistics on this subject started being recorded in 1993.
Approvals for remortgages were less affected falling by 34% since February to 34,400.
Gross new mortgage lending also fell sharply to £14.4 billion, 38% lower than in February (see chart 5) and repayments on mortgage lending reduced 26%, to £13.9 billion. This partially reflects the effect of payment holidays and a lower level of debt repayment. The sharper fall in gross lending than repayments means that net mortgage borrowing fell, and was only £0.3 billion in April compared to an increase of £4.3 billion in February. This is the lowest net increase since December 2011.
Interest rates on fixed-rate mortgages have remained stable in April and variable rate mortgages saw a drop in interest charged as the Bank base rate reduction to 0.1% will continue to filter through. The effective interest rate paid on the stock of variable rate mortgages fell 0.46% to its lowest point recorded by the figures at 2.39%.
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