Tuesday 2nd June 2020 - 09:41 (BST)
Figures released by the Bank of England have shown the number of mortgage approvals in the UK fell sharply to 15,800 over April - down from 56,161 in the previous month and well below market expectations of 23,776.
The BoE is also predicting a 16% slump in prices over the rest of 2020 as would-be buyers are expected to wait six months before returning to the market. Figures released by Nationwide earlier today showed the average price of a UK home dropped 1.7% over May, the biggest fall since February 2009 and eradicating Aprils unexpected 0.9% gain.
Some analysts now believe there could be further adjustments within the sector as a whole, despite the ultra-low interest rates and mortgage holidays on offer. Unemployment sits at 2.1 million and the treasury is yet to wind down its job-furlough scheme which supports a further 8 million within the UK.
Others feel the fall in supply will cancel out the fall in demand as has happened in the USA, where only the most desperate of sellers are listing and prices have marginally increased. Many UK homeowners are now focussing on improving their current property to adapt to the new norms that Covid-19 has bought about. Particular attention is being paid to home office installations and the improvement of outdoor space.
The UK housing sector is one of the most vital components to the UK economy, with new builds helping provide job creation and rising prices stimulating consumer confidence. It had remained remarkably resilient over the recent Brexit turbulence as demand outstripped supply, pushing prices up 4% over 2019 alone.
