Demand for mortgage advice and the amounts people want to borrow remain strong in August, despite us having now firmly entered the holiday period.
Numbers of borrowers remain on the increase, although the amount they want to borrow appears to have levelled off slightly following July’s very large requested borrowing increases.
In all but two UK regions the average amount people are asking to borrow has decreased by between 1.5% and 8%. The average mortgage borrowing amount across the whole of the UK for August is £152,259 which is slightly down on July’s figure of £155,229, a drop of just 1.95%.
Scotland and South Central are the only regions to have bucked this trend. Scotland has seen a fairly pronounced increase in borrowing from £121,156 to £139,712, a rise of 13.28%; while interestingly South Central appears to have recovered from a small dip last month, experiencing a rather aggressive upward swing. In June we saw average borrowing in this South Central region dip by 3.34% from £165,714 in July to £160,356 in August. This month however, this region has seen a massive increase of 18.47% bringing the average borrowing amount to £196,680, the highest it has ever been.
There is one region that continues to buck the trend of moderation however; last month we expressed particular concern regarding London’s huge increase of 16.71% on June’s figures. This month average requested borrowing for London remains at £258,973; and while this is slightly down on last month’s £269,500 it is still at a height that is more than double most other regions in the UK and appears to be unsustainably high.
Taking London out of the picture, despite these odd regional increases, what we are seeing this month are more realistic borrowing figures which are at a more sustainable level to carry us through the remainder of the economy’s recovery.
This could reflect that although the market is clearly re-awakening in terms of buying activity, consumers remain cautious of the amount they are willing to borrow. This may be due to continuing concerns about the possibility of a double dip recession or the Government’s promised cuts of thousands of public sector jobs.
Meanwhile the numbers of consumers requesting mortgage advice via Leadbay continues to increase. Continuing on from last month’s 16% increase in lead volume the number of borrowers looking for advice went up by the same percentage again this month. We are now well into the holiday season and would normally experience a dip at this time, however Leadbay’s lead numbers have been boosted by more than 20% this year following additional lead suppliers which have increased the number of leads available. Without this boost, the number of borrowers would have fallen by 4% in August, but this remains much less than the usual August dip in enquiries, likely to be due to the increased number of staycations in this country.
Adding to the positive news is that we also continue to see signs of renewed market confidence from advisers which are reflected in average lead prices. Whereas an increase in lead volumes would normally prompt a decrease in lead price in Leadbay’s market driven bidding system – for the second month running we experienced a slight increase in lead price from £13 to just over £15 despite the increased volume.
Altogether, these figures seem to reflect that although the market remains in a period of transition, it remains a positive picture of increased confidence with steady signs of market recovery. Let’s hope this continues and the doom-sayers predictions of a double dip remain nothing more than negative hype.
