The Bank of England has revealed that March saw the number of mortgage approvals for house purchase fall sharply to 15,800, around 80% below the February level.
This was around half the number of approvals as the trough during the financial crisis of 2008/9, and the lowest since the series began in 1993.
Approvals for remortgage (which include remortgaging with a different lender only) have fallen by less, to 34,400, 34% lower than in February.
Gross (new) mortgage borrowing fell to £14.4 billion, 38% lower than in February.
Repayments on mortgage lending also fell sharply, to £13.9 billion, 26% lower than in February. This reflects a sharp fall in full repayments of loans, as well as the effect of payment holidays, the central bank said.
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 was the lowest net increase since December 2011.
Hugh Wade-Jones, managing director of Enness Global Mortgages, said: “The latest figures present a dramatic decline across the market with both lender and buyer activity evaporating at a greater rate than forecast. But before we head for the hills, it’s important to remember that this data only provides a snapshot of market conditions and one that was taken in the midst of a full market shutdown.
You wouldn’t cut someone down at the knees and expect them to run a marathon and quite frankly, it’s a wonder that any mortgages were approved at all let alone funds deployed.
So while the UK property market may be experiencing an out of body experience due to an abrupt reduction in activity, it’s far from being pronounced and although it may take a month or two to see a recovery materialise, early indicators at ground level suggest there is plenty of life in it yet.”