The picture in October was very stable. Despite a consistent set of reports saying that average house prices are on the up, borrowers looking for mortgage advice were asking
for the same amounts as in September on average.
A positive sign was in the demand from mortgage advisers for new business, with a 13% increase in activity. The average amount that borrowers in London tried to borrow rose to £217,800 for the first time ever – a huge increase on January’s figure of £193,000. All southern regions saw similar percentage increases of 2%-3% , driving speculation that any recovery is isolated in the south and that national figures hide the true picture of a north/south divide.
The rise in requested borrowing spread as far north as the Midlands but did not
encompass Anglia, where amounts dropped by 3.3%; however demand from advisers to be put in touch with new mortgage clients grew exponentially.
The only other region to see adviser demand anywhere near these levels was the South Central region, although there was a marked increase across the whole country.
Average borrowing in the South East was £170,000, falling to just £117,600 in he Midlands, which despite a 2% increase, was a huge £100,000 lower than London. In the North East, Scotland, Wales and Anglia, borrowers asked for mortgages between 2.7% and 3.7% less than they had in September. Borrower demand for advice also fell in Wales, although this did mean that there was more competition for leads so lead prices rose a little.
The biggest decrease in requested mortgage amounts was in volatile Northern Ireland, where the amounts dropped by almost 6% from £126,000 to £119,000. However, Northern Ireland is
not indicative of the rest of the UK because with the smaller numbers of borrowers,
just a small number of relatively large or small loans will have a noticeable different
on the average. The North West was an anomaly: loan amounts remained identical to last month, but the number of borrowers decreased quite significantly.
Borrower numbers through Leadbay appeared a little down across the country this month, although these figures have been influenced by Leadbay improving the quality of its leads by not accepting leads from anyone who does not reach its stringent quality criteria; borrower demand remains as high as ever.
These results are a positive sign that there is either more confidence in the market, or that mortgage advisers find it easier to place business. When buying leads, advisers can choose the size of the deposit that their client has, and this appears to have a positive effect on the ability of advisers to turn that lead into business.
Next month, we expect to see an increase in demand both from borrowers
looking for advice and from mortgage advisers looking for new clients ahead of
Christmas, while we expect borrowing amounts to remain much as they were
this month, mostly stable but with a few increases in regions across the country.
