You are here: Home - Mortgages - First Time Buyer - News -

Mortgage approvals to drop by 350,000 in 2020

Written by:
There will be 350,000 fewer mortgages approved this year as a result of the coronavirus outbreak and subsequent lockdown measures, it has been estimated.

More than 150,000 mortgages to first time buyers will be lost, as a total of 526,000 home sales go up in smoke, with a significant knock-on economic impact, according to estate agent Knight Frank.

It means £7.9bn will not be spent on DIY and renovations, while £395m less will be spent on removals companies.

The government could be looking at £4.4bn lost from stamp duty and £1.6bn in VAT, Knight Frank calculated.

Simon Gammon, managing partner at Knight Frank Finance, said:It’s become increasingly clear lenders are eager to do business.

“Two weeks ago many banks retreated to the safety of more conservative lending criteria as they were overwhelmed by calls in the wake of two Bank of England rate cuts and the shut-down of many international call centres.

“But in recent days we’ve seen the major lenders coming back, raising the loan-to-value ratios they are willing to lend at, eager to gain market share. All they need to get the borrowers moving is a functioning housing market.”

The agency has called for “urgent government stimulus” to reignite the housing market after the pandemic.

Knight Frank said a stamp duty holiday should be implemented and Help to Buy extended.

The conveyancing process should also be reviewed, virtual planning meetings introduced and greater flexibility around planning to speed up and create efficiencies.

Liam Bailey, global head of research at the firm, said: “Despite the fact the government will forgo a significant amount of stamp duty revenue in 2020, it seems clear there will need to be a stamp duty holiday to actually get the market moving once the lockdown is lifted, but this move alone will not be enough.

“There will need to be moves across a wider number of areas including an extension to Help to Buy to support first time buyers and support activity across all price bands.”


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Metro Bank to refund £11m to customers

Around 130,000 Metro Bank customers will receive a share of £11.4m after the lender failed to send texts warning people...