There is a relatively positive outlook last month, with everything on the up. Although the rises are modest it makes a refreshing change from the past few months to finally have everything pointing in the right direction. The overall picture shows that the amounts which people are asking to borrow have risen by 1.6% in May. This is compounded by the 2% they rose in April, taking average requested borrowing to £136,600 for the first time since last June.
The number of borrowers has also shown a rise this month after quite a steep drop in April. As the April figures were partly seasonal, as there are always fewer requests for advice over the Easter period, it is reassuring to see a bounce back in May.
Another positive aspect has been a rise in adviser activity. Lead prices that have been very low in the last few months rose by 12.5% in May. Lead prices are set by the advisers buying the leads, not by Leadbay, so any rise in prices is as a result of advisers feeling more confident that they can now place the business and make a return on those leads.
Of course, lead prices are still at historically low levels, and less than half what they were in May 2008, but again it is positive to see any rise in confidence. As always, we have regional variations in everything except the number of people asking to speak to an adviser, as that was up across the board.
The amounts people asked to borrow rose by more than 4% in a number of regions, including Scotland, Wales, Anglia and the South East. This was balanced out by a fall in borrowing levels in Northern Ireland and the North West by 2.6% and 2.9% respectively, and a more modest fall of 0.9% in the South West.
Requested borrowing in London rose by 2.1%, which, while more than the average, is less than many of the other regions. However, it was enough to take the average mortgage amount to more than £200,000 for the first time since last July.
One of the largest increases in the number of consumers looking to speak to an adviser was in the North East, a rise of 15%, putting it back in top spot after several months of playing second fiddle to the North West, the Midlands and even Anglia.
Northern Ireland was up by even more, with 17.5% more people looking to speak to an adviser. However, Northern Ireland’s smaller population means that a relatively small number of people can make a significant difference, so we frequently experience quite dramatic fluctuations in this region.
In fact, only Northern Ireland saw a slight drop in lead prices. This was directly related to this large influx of consumers, because as more borrowers enter looking for advice, advisers access the number of new clients they need and the price drops on the remainder as a direct result of supply and demand.
All in all, it was a positive picture last month. Whether this is the start of a sustained recovery is obviously too early to say, but it is good to have all the figures pointing in the right direction again.
The conclusion for advisers is that the borrowers are there in substantial numbers and they are asking for your advice. n
