It has been a while since we last looked at what borrowers around the UK are asking for, in terms of mortgage size, so I thought it would be interesting to compare what borrowers want this March compared to March 2008 and even the year before.The amount that people are asking to borrow, not unsurprisingly, has fallen. The shocks come in the regional variations. Generally, people are asking to borrow just under 5% less than they were at this time last year, but that falls to just a 2.5% drop in Scotland and Wales, where with average mortgage sizes of £208,000 and £211,000 respectively, borrowing amounts have always been lower than in the rest of the UK.
The highest falls were not in the places with the highest house prices, however. Northern Ireland has actually seen the highest fall in requested mortgage sizes, falling by more than 13% from £128,000 a year ago down to £110,800 now. Similarly, the North East has seen a 10.5% fall in mortgage sizes from £118,000 a year ago to £108,000 this March.
The falls have had the interesting effect of levelling the amount that people ask to borrow: across the whole of the North, Scotland, Northern Ireland and Wales, there is now only £2000 difference in borrowing amounts, whereas last year there was a spread of £18,000.
There is, as always, a North-South divide in mortgage amounts: London, surprisingly, saw a relatively small percentage drop in mortgage sizes, of 6.6% although in real terms this means a drop of £13,000 from £204,000 last March to £191,000 this year. Across the rest of the South, there were uniform drops of 4.5% to £159,000.
It is fascinating to see regional change in attitudes towards advice however. Across the North and the Midlands, there were between 5% and 10% fewer people asking for advice compared to this time last year; while in the rest of the country, there was a marked increase in requests for advice, with borrowers from Anglia, the South West and Northern Ireland valuing mortgage advice most highly with between 10% and 12% more people in these regions asking to speak to an adviser. Anglia, for the first time, had more people asking for advice than any other region in the UK.
Arguably, the most dramatic change has been in the value placed on leads. More advisers than ever are buying leads and relying on them as a valuable source of new business, however partly because of the high number of potential clients and partly as a result of the difficulty in placing mortgage business the price of these opportunities has dropped dramatically.
Two years ago the average mortgage lead price was £21; by March last year, that had dropped to £13 and this March the average mortgage lead has dropped by a further 30% to just under £9.
What this means is that while it may take more leads to see an immediate conversion to business because of the difficulty of placing mortgages, the profit you make on any placeable business is significantly higher than it was before, which should result in a significant profit even if it takes three times more leads to make a conversion than it did two years ago. n
