New data from Trussle reveals impact of coronavirus on UK mortgage applications

  •  First-time buyer mortgage applications down by 35% year-on-year during April¹

  • Applications for remortgages up 110% year-on-year during April suggesting current homeowners are looking for to save money with better rates²

18 May 2020, London – New data from online mortgage broker Trussle has revealed the startling impact that the coronavirus lockdown has had on the UK mortgage market.

The coronavirus pandemic also seems to be disproportionately affecting first-time buyers, with first-time buyer mortgage applications down by 35% year-on-year during April.³ This could be due to a number of reasons. The current, and rather sudden, lockdown resulted in an end to physical valuations, and as a consequence, borrowers were being turned away as many lenders could no longer accept applications with a higher loan-to-value.  This also began to affect workers who have been furloughed or taken a cut to their income. 

How has the furlough scheme affected mortgage applications? 

Since the coronavirus lockdown came into effect, some 7.5 million workers have been furloughed.⁴ Trussle has seen applications by furloughed workers being handled by lenders on a case by case basis. 

Generally, lenders are willing to accept furloughed income, providing applicants have confirmation from their employers that they will be going back to work. However, most lenders will only consider furloughed workers’ reduced salaries. As such, being on furlough may affect how much you can borrow. Prospective home buyers on furlough still wanting to explore a house move should seek professional advice from a broker.

The furlough scheme is also impacting mortgage applicants across the wealth spectrum. High earning furloughed workers are experiencing their own difficulties when trying to secure a mortgage. For this bracket of home buyers, the scheme’s cap of £2,500 per month has meant some of their salary is instantly discounted by lenders, meaning more expensive homes might be off limits until they are able to return to work. 

Miles Robinson, Head of Mortgages at online mortgage broker Trussle, commented:

“As the coronavirus crisis continues to impact people’s livelihoods, those who have been furloughed are naturally likely to be concerned about their mortgage applications.

During these difficult times, many lenders will only consider 80% of a furloughed customer’s income in affordability calculations, provided that the applicant has confirmation that they’ll be going back to work. As there’s a monthly cap of 80% of salary paid up to £2,500 for furloughed workers, people earning more than this will be impacted more significantly. Many lenders are also hesitant to consider overtime and bonuses at this point in time as it is certainly not guaranteed income”

While other lenders won’t accept furloughed customers at all, we’ve seen flexibility from those who are accepting customers on furlough and we’ve helped a number of customers in this position to secure mortgages. The criteria has been changing frequently during these times, so anyone who has been furloughed should seek professional mortgage advice.”

In contrast, the lockdown period has proved a popular time for current homeowners to reassess their current mortgage deal. Trussle has seen a huge 110% year-on-year increase of remortgage applications.⁵ At a time when household finances are under pressure, Trussle has found remortgaging can save people £334 on average per month.⁶ Mortgages are often the biggest monthly bill that people face and it’s worth using a remortgage calculator to see if switching could save you money.

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Notes to editors

For further information, please contact:

We’ve taken extra care to ensure the information provided within this release is presented in a way that’s compliant with regulatory requirements. If you have any questions about how to repurpose this information or require any further assistance, please contact Katie Halfhead at Trussle.

1. Trussle internal data, accurate as of 14.05.20

2. Trussle internal data, accurate as of 14.05.20

3. Trussle internal data, accurate as of 14.05.20

4. https://www.bbc.co.uk/news/business-52634759

5. Trussle internal data, accurate as of 14.05.20

6. https://trussle.com/marketing-claims

About Trussle

Trussle helps people love their journey of owning a home. We’re your free online mortgage broker, helping you wherever you are on the ladder.

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Did we mention that our service is completely free? Join Trussle to see where your home ownership journey could take you.

In September 2016 Trussle launched an industry-first partnership with online property portal Zoopla, making it possible to find and buy a home in one seamless experience. Trussle is backed by some of Europe's leading technology investors including Orange Growth Capital, LocalGlobe, Ed Wray (founder of Betfair), Ian Hogarth (founder of Songkick), Seedcamp, and Zoopla Property Group.

Trussle is a trading style of Trussle Lab Ltd, which is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

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