Rolling coverage of the latest economic and financial news
- Latest: Just 9,300 UK mortgages approved in May
- Mortgages approvals down 90% (!) since February
- Economists: Lenders and borrowers both nervous
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- Coronavirus – latest updates
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11.14am BST
Over in the eurozone, consumers and businesses are a little less gloomy about economic prospects – as lockdown measures are lifted.
The European Commission’s economic sentiment indicator has risen from 67.5 in May to 75.7 in June. That’s the highest level since the pandemic hammered the European economy in March, but still much lower than in February (just before lockdowns began).
European Commission report #Eurozone #economic sentiment up markedly in June to 3-month high. Index up to 75.7 from 67.5 in May & 64.8 in April (lowest since series began in Jan 1985). Still well below February level of 103.4. Consumer confidence up & all business sectors higher
June #eurozone data this morning show rather underwhelming recovery in #economic sentiment, but optimists will see the beginning of a ‘V’, especially in #employment expectations… pic.twitter.com/OvQEJu4JGQ
11.01am BST
Josie Dent, senior economist at the CEBR thinktank, says mortgage approvals are so low partly because lenders are cautious, and partly because potential borrowers suspect prices may fall.
On 13th May, housing market activity resumed, after a seven-week hiatus amid the worst of the coronavirus crisis. The pent-up demand built up during the period when moving home was banned at the height of the lockdown was reported to have led to a resurgence in activity following the lifting of certain restrictions. Rightmove data showed that on the first day of the housing market reopening, the number of home-movers visiting properties returned to pre-lockdown daily levels, and was up 4% on the same Wednesday in 2019.
However, transaction numbers are still kept low by tighter credit conditions. Mortgage providers have become far more cautious when lending and require larger deposits, thereby limiting the number of people who can buy a home. Many people are also likely to be put off from purchasing while house prices are expected to fall, preferring to wait and see if they can get a better deal.
Source: UK mortgage approvals slump as Covid-19 hits housing market – business live
Category: Stock markets, Business, Coronavirus outbreak, FTSE, Economics
