4The number of advisers buying leads has increased steadily since the summer break. There has been a dip in the number of borrowers looking for advice since September, but borrower numbers are up substantially overall on last year – by 14% year-on-year in Leadbay’s case. This flood of new borrowers asking for advice has taken certain lead prices down to historically low levels, with some first-time buyer leads selling for as little as £2. It has pushed the cost of an average lead down to £12.08, less than half the price leads sold for in October 2007, when the average price was £25.84. While conversion rates are considerably lower this year, so is the cost of acquiring new clients.
Borrower expectations regarding how much they can borrow have remained broadly the same as September, but with regional variations. In Anglia, the amount people want to borrow has fallen for three months in a row and now stands at £140,000 – a 9% drop from its high of £153,000 last December. In London, the average requested borrowing amount was almost £199,000 in October, down from a peak of £216,000 in February. The South East remained stable in October, with the average borrowing requested at £163,800.
In the neighbouring South Central region, the amount people wanted to borrow increased by almost £5000 during September, taking it to £164,800. The South West saw a sizeable 4.5% drop in the amount people wanted to borrow from last month, though the region had seen a 6% increase in requested borrowing amounts in September, so this dip levelled the figures out a little.
Some of the lowest borrowing amounts were in Wales, where the average mortgage requested was just £108,500. Conversely, borrowers in the Midlands want to borrow more than at any time since May and saw the biggest one month rise of any of the regions, albeit from a relatively low base. The North West and the North East both had almost identical borrowing amounts at £112,500 this month, but while North West borrowers lowered their expectations by 1.21%, those in the North East increased theirs by 3%. Scottish borrowers have the lowest expectations, asking to borrow an average of just £104,700.
Finally, Northern Ireland has been the most volatile region in the UK, with average requested loan amounts fluctuating by as much as £15,000 in a single month, and this month dropping by 12.5% to £117,500, the lowest since June. These swings are due to the relatively small number of borrowers so a few very large or very small loans will easily skew the averages.
Although it is harder to place business, borrowers need advice now more than ever. It is now easier and cheaper to get in touch with new clients than ever before. n
Grant Stevens is managing director of Leadbay
