How much will your home be worth after coronavirus?
Number of new mortgages lowest since records began

The number of new mortgages approved in the UK has fallen by 90% since the start of the coronavirus pandemic, leading to speculation that house prices will drop too.
Just 9,300 mortgages were approved in May, the lowest number of approvals recorded since the Bank of England began collecting data in 1993.
It is 90% lower than the 140,429 approvals completed in February, before the impact of Covid-19 hit the property market, says Mortgage Solutions.
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What does fewer mortgages mean?
Fewer approvals reflects the “devastating impact” that the coronavirus pandemic has had on the mortgage and property markets, says Mark Harris, chief executive of SPF Private Clients.
“With lockdown meaning that lenders were unable to send valuers out to physically view properties, the number of mortgages approved fell considerably,” says Harris. “With the backlog of valuations clearing now that surveyors can once again carry out valuations, we expect mortgage approvals to pick up.”
Andrew Montlake, managing director of Coreco, told the site that “a 90% drop-off in mortgage approvals for house purchase in May is a jaw-dropping but thoroughly understandable number given the extraordinary events of the second quarter”.
“Along with the ongoing supply deficit, there remain certain fundamental supports for the property and mortgage markets despite the uncertain environment,” he said.
Hansen Lu, a property analyst at Capital Economics, told The Guardian that lending was likely to pick up again in June after reports of a surge in demand for property and agreed sales.
Will fewer mortgages mean lower prices?
Not necessarily, at least in the long term. Knight Frank says prices will fall slightly this year as the number of sales drops by a third, then rebound by 5% next year, reports The Guardian.
The consultancy based its calculations on the assumption that the British economy will shrink by 4% in 2020 before growing by 4.5% next year as the pandemic comes to an end.
Liam Bailey, the global head of research at Knight Frank, said: “We have to expect weaker economic activity in the first half of 2020, the dislocation in the jobs market and weakened consumer sentiment will impact on prices – however, the relatively finite timespan of the crisis means declines will be limited.”
Before the lockdown, the market was in a strong position. A “sharp uptick in sales and price growth was seen across the UK, with even the prime central London market seeing a reversal of a five-year-long price decline”, says Bailey.
Nationwide reported a £3,000 surge in the average price of a home in Britain in March before the lockdown, the fastest growth for two years. But it says “housing market activity is now grinding to a halt”.
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The number of sales had risen by more than 12% in January as buyers and sellers “awoke from a Brexit-induced slumber”, says Which? magazine.
But with sales dipping over lockdown, house prices and estate agencies were hit hard by the pandemic.
Property sales in England have since rebounded to pre-coronavirus levels. The number of new sales agreed rose by 137% after the housing market reopened last month.
Richard Donnell, director of research at property portal Zoopla, says the boost in sales is down to a mix of factors and “is not solely explained by a return of pent-up demand”.
“Covid has brought a whole new group of would-be buyers into the housing market,” he explained. “Activity has grown across all pricing levels, but the higher the value of a home, the greater the increase in supply and sales as people look to trade up.”

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