Mortgage approvals for house purchases slumped to a seven-year low in March as social distancing measures impacted the housing market.
The slump comes after mortgage approvals for house purchases hit a five-year high in February. It was clearly caused by the measures announced by the Government during March to combat the coronavirus pandemic.
A total of 56,161 loans were agreed for people buying a home in March, the lowest level since 2013, according to the Bank of England.
Why are mortgage approvals suffering?
Social distancing measures were first introduced in the UK in the middle of March.
Lockdown came into force on 23 March. But it was not until 26 March that the government published guidelines asking people who were in the middle of a property transaction to delay exchanging contracts.
As such, the virus is only likely to have impacted figures during the second half of March. So it’s likely that the main impact was during the final week of the month.
Can I still move house during coronavirus?
Coronavirus rules on moving house are not simple.
If the move is considered critical and you can’t agree on another date, you can go ahead so long as no-one involved is self-isolating or showing symptoms of coronavirus.
In light of the current circumstances, banks and building societies have agreed to extend mortgage offers beyond the traditional three-month deadline for customers wanting to buy a home.
If you think you will not be able to complete your purchase within three months of your lender agreeing your mortgage, contact them to ask for an extension.
How do I move forward with my house purchase right now?
You may be able to move forward with your house purchase if it’s currently empty.
But if the property is occupied, everyone involved in the transaction has been asked to try to agree a new moving date once the current lockdown measures have been lifted.
Virtual viewings keeping transactions moving
But some buyers and sellers are keeping transactions moving as much as possible with virtual viewings.
The types of virtual viewing available vary between different estate agents.
Some have used 3D cameras that enable house-hunters to take a self-guided tour around a property using their mouse to do everything from standing at the kitchen sink and looking out of the window, to measuring the size of wardrobes in the bedroom.
In other cases, agents have taken their own videos as they walk around a property themselves.
Virtual viewings are taking off as home-hunters continue to look for new properties during the coronavirus lockdown.
Find out more about virtual viewings.
When will lockdown measures be lifted?
The Government has not yet put a date on when the current lockdown measures will be lifted.
Instead it has set five key tests that must be met first. The current restrictions will then be “gradually refined”.
Details on how this next phase will play out are expected to be published in the coming days.
In the meantime, while property transactions may be largely on hold, prospective buyers can still search the market for their next home.
Estate agents have been quick to respond to the situation. Many have introduced virtual tours to enable people to get a good feel for a property even if they cannot currently view it in person.
Top three takeaways
- Mortgage approvals for house purchase slumped to a seven-year low in March as social distancing measures hit
- A total of 56,161 loans were agreed for people buying a home in March, the lowest level since 2013
- Banks and building societies have agreed to extend mortgage offers beyond the traditional three-month deadline for customers buying a home