Mortgage lending halved during lockdown
The total value of new mortgage commitments made by lenders more than halved to its lowest level in a decade while the housing market was in the depths of lockdown, new figures show.
The value of new mortgage commitments - lending agreed to be handed out in the coming months - was £34.3bn in the second quarter of 2020 – 53.2% lower than a year earlier, according to the mortgage lenders and administrators statistics released jointly by the Bank of England and Financial Conduct Authority.
The latest figure was the lowest quarterly total since the first quarter of 2010.
In the second quarter of 2019, lenders' new commitments had totalled £73.4bn.
The total value of mortgages handed out during the second quarter, at £44.1bn, was a third lower than in the second quarter of 2019, when the total stood at £66.1bn. Many mortgage applications were temporarily paused by lenders in the early weeks of the coronavirus lockdown, amid problems with carrying out physical valuations due to social distancing measures.
T h e f i g u re s a l s o s h ow that a smaller proportion of mortgages handed out in the second quarter of 2020 were low-deposit loans, when compared with the same period a year earlier.
Analysis from financial information website Moneyfacts.co.uk revealed this week that more than 1,000 low-deposit mortgage deals have vanished from the market in the past six months, in a blow to first-time buyers.
The statistics also show the share of mortgage lending for buy-to-let purposes, including property purchases and re-mortgaging, was 14.4%, an increase of 1.2% on the second quarter of 2019.