While mortgage borrowing increased slightly in May, approvals fell back further to a new record low, according to the latest Money and Credit statistics from the Bank of England. Its data shows that the mortgage market "remained weak in May" in comparison to pre-Covid. Mortgage borrowing totalled £1.2 billion, slightly higher than in April but weak compared to an average of £4.1 billion in the six months to February 2020. The Bank says the increase on the month reflected more new borrowing by households, rather than lower repayments.
Residential property transactions are beginning to increase from the lows seen in April, according to the latest figures from HMRC. The data shows that there were 48,450 residential transactions in May, down 49.6% compared to May 2019 but 16% higher than in April.
CPI inflation fell to 0.5% in May, down from 0.8% in April, according to the latest figures from the ONS. The rate was last lower, at 0.3%, in May 2016 in the lead up to the Brexit referendum. CPIH - the ONS' headline measure which includes owner occupiers’ housing costs - fell from 0.9% in April to 0.7% in May. This is also the lowest reading seen since May 2019 when the 12-month rate was also 0.7%. The rate was last lower, at 0.6%, in February 2016. The ONS says falling prices for fuel and a variety of recreational and cultural goods resulted in the largest downward contributions to the downward change.
GDP fell by 20.4% in April, following a fall of 5.8% in March, according to the latest statistics from the ONS. The monthly fall is the biggest on record for the UK, almost ten times larger than the steepest pre-coronavirus fall. The ONS says the negative impacts of social distancing and lockdown have led to a significant fall in consumer demand and business and factory closures, as well as supply chain disruptions. The data shows that GDP fell by 10.4% in the three months to April.
The first week in June had the five busiest days for mortgage searches since lockdown began and weekly total searches for purchase mortgages hit a new 2020 high, according to the latest figures. The data shows that the week to Saturday was the busiest week for purchase mortgages this year – including pre-Covid highs - with Monday and Wednesday the second and third busiest days of the year for purchase mortgage searches.