UK mortgage approvals beat expectations and rocketed in June as the housing market reopened from the coronavirus lockdown, the latest figures have shown.
The number of mortgages approved by UK banks rose to 40,000 in June after May’s record crash to just 9,300, the Bank of England said today. Analysts had predicted a rise to 34,000.
However, approvals were still 46 per cent below the February level of 73,700.
“The mortgage market showed some signs of recovery in June, but remained relatively weak in comparison to pre-Covid,” the Bank of England said.
An increase in house purchases helped consumer borrowing trends take a step closer to normality in June.
UK households pay down debts as mortgage approvals rise
Households repaid £86m of debt last month. But that was lower than the repayments totalling £15.6bn over the March to May period.
People have been paying down their debts and saving money as there has been little to spend on during lockdown. The net repayments of the last four months contrast with an average of £1.1bn of borrowing per month in the year and a half to February.
The UK government has gradually loosened the country’s coronavirus restrictions over the last two months. In May it allowed the housing market to reopen, leading to June’s uptick in mortgage approvals.
In June the government allowed “non-essential” shops to reopen. And earlier this month pubs, cafes and restaurants were allowed to serve customers again.
The Treasury has unveiled a number of policies to encourage people to part with their lockdown savings. It hopes a VAT cut for the hospitality and tourism sectors and “eat out to help out” vouchers will boost the economy.
Chancellor Rishi Sunak’s stamp duty holiday has already helped the London housing market after just two weeks, data showed yesterday. London house sales rocketed 27 per cent after the property tax was slashed, housing website Zoopla said yesterday.