Published On: Wed, Sep 9th, 2020

Mortgage UK: Agreements fall to lowest in a decade – BoE statistics revealed | Personal Finance | Finance

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Mortgage commitments fell to £34.4billion in the second quarter of 2020 – commonly known as April, May and June – according to figures from the Bank of England and the Financial Conduct Authority (FCA). This was a 50 percent drop on the previous quarter, illustrating the rapid change in the market.And the figures also revealed this was the lowest level of new commitments since the first quarter of 2010 – where the value was £33.7billion.

Also notable was the 53 percent decline from the same period of time last year.

While the reasons for this reduction may be varied, the financial crisis brought about by COVID-19 is likely to blame.

Unfortunately, many people right across the country are facing having their mortgage declined.

The reasons for this can be varied, however, can cause disruption for those who were dreaming of purchasing their property.

READ MORE: Mortgage deals disappear from the market as borrowers are hard hit

Indeed, many lenders have been forced to temporarily toughen their lending criteria to reckon with the crisis.

And in some cases, products have been pulled off the market in their entirety for the time being.

Lenders seem to be more reticent about borrowers with small deposits entering into high loan-to-value products.

The end of government support measures in October could mean many are cut loose from current financial safety, and there is concern many will not be able to meet mortgage payments later down the line.

Concern has also risen surrounding house prices, and how these will be affected by the economy.

However, for those who have had their mortgage agreement fall through or rejected, it does not have to be the end of the road.

Waiting to build up a higher deposit could be a solution which provides lenders with more confidence that an individual or couple can meet their payments later down the line.

Paying off any outstanding debts, and bettering one’s credit score is often seen as a way of making oneself more attractive to a lender.



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