Summer appears to have come late! Not only have we finally had some half-decent weather in September, but borrowers also appear to have taken late holidays.

Traditionally, August is the quiet month, typically seeing a drop of around 15% in the number of people looking to change their mortgages. This year however, the fall seems to have happened in September.

Interestingly, this mimics the same pattern as last year, and indicates that consumer
habits are changing, with more people taking holidays when prices have dropped
after the school holidays. Lower holiday prices would be of increasing interest to
cash-strapped borrowers this year as many incomes have dropped and people are
becoming more careful about what they spend and where.

It will be of no surprise to anyone that central to the general drop off in activity has been a decrease in the number of people who are looking for remortgages. The good
news is that the number of people looking for advice for a purchase mortgage to buy new houses is up, and we expect that trend to continue throughout autumn.

Consumer confidence seems to have improved, reflected in how much people feel they can borrow. The highest loan amounts were in London and the South East and surrounding regions. Average requested borrowing in London rose quite substantially by more than 5% to £213,300, a record high even for London and significantly more than in the rest of the country where borrowing amounts have never got close to £200,000.

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Anglia’s average borrowing was £65,000 lower than London, but also rose in excess of 5%, up from £140,000 to £148,000 in September. The highest rise of 9% was in Northern Ireland, but, as we have said before, Northern Ireland’s relatively small population means that just a small number of loans that are significantly higher or lower can cause large fluctuations in the average requested borrowing amount.

Only two regions saw a decrease in the amounts that people wanted to borrow, and of these the largest was the South West. This has to be put into context however: although South West saw a 4.3% drop this month, this follows straight on from the same percentage rise in August, the highest rise in the country, and so brings the region’s £133,000 average borrowing back to just above what it was in July and still one of the highest loan amounts it has seen all year.

The highest number of borrowers was in the North East and the Midlands, with the North West dropping back just slightly again to fourth place, with Anglia in third.

With a lower number of leads, lead prices rose a little this month as more advisers were competing for the new customers actively looking for advice. But the price increase was only pence in a lot of places, with the average lead price still just £8.04.

Our outlook for October is for a significant pick up in the number of borrowers and another small but steady increase in the amounts that they want to borrow.