The number of new home loans approved in Britain has fallen by 90% since the start of the Covid-19 pandemic to the lowest since at least the early 1990s, the Bank of England has said. Threadneedle Street’s monthly update on the state of the property market found that despite the reopening of estate agents from the middle of May, the number of mortgage approvals fell to 9,300 from 15,900 in April. The number of new home loans granted in May was well below the 25,000 anticipated by the financial markets. It was the weakest since the Bank of England series began in 1993. At the start of the year, more than 70,000 new loans were being approved each month. Analysts said the depressed state of the mortgage market was not wholly unexpected, given the restrictions on viewing homes until May and delays in home loan approvals. “The latest fall isn’t a sign that the market is struggling to recover,” said Hansen Lu, a property analyst at Capital Economics. “Rather, it probably reflects the gap in the sales pipeline, from when the market was closed between March and May. “With households confined to their homes, there would have been far fewer sales than usual moving to the mortgage approval stage in May. Also, many buyers with half-completed sales have been renegotiating on price, which also points to a delay in the sales pipeline.” Lu said lending was likely to pick up in June after reports of a surge in demand for property and agreed sales. Mark Harris, the chief executive of the mortgage broker SPF Private Clients, said: “Covid-19 has had a devastating impact on the mortgage and property markets, so it is no surprise that lending was weak in May, with approvals for house purchase falling. “With lockdown meaning that lenders were unable to send valuers out to physically view properties, the number of mortgages approved fell considerably.” The Bank of England data also showed consumers continued to pay off their debts in May, in a fresh sign the pandemic has made households more cautious. People repaid £4.6bn of consumer credit in May following repayments of £7.4bn in April and £3.8bn in March, the Bank said. There were repayments on credit card lending (£1.8bn) and other forms of consumer credit such as overdrafts (£2.8bn). The three successive hefty net repayments of consumer credit compared with additional borrowing of about £1bn per month in the 18 months to February 2020. The Bank said the “extremely weak” net flows of consumer credit meant the annual growth rate stood at -3.0%, the weakest since the series began in 1994. A breakdown of the overall figure showed the annual growth rate of credit card lending was negative for the third month running, falling to -10.7%, compared with 3.5% in February. The reluctance of consumers to borrow money since the UK went into lockdown has come despite a cut in borrowing costs. According to the Bank, effective rates on new personal loans to individuals fell 34 basis points to 5.10% in May. This was the lowest since the series began in 2016 and compares with a rate of about 7% at the start of 2020.