Average mortgage borrowing requests continued to grow month on month throughout the summer. Despite the fact that the CML has reported a drop in borrowing figures this month, the number of consumers looking for mortgage advice continues to rise.
As we leave the holiday season well and truly behind us – now is a good time to reflect on the performance of the mortgage lead market over the summer.
Since March 2010, month on month, we have seen constant increases in the size of mortgage that consumers have been requesting advice on. September follows this positive upward trend with an average mortgage size of £160,976 a 5.41% increase over August and a 14.78% increase compared to last year. This sustained increase in requested borrowing amounts has occurred alongside increases in both the numbers of people asking for advice and lead prices which would suggest an improved, albeit still largely conservative, increase in confidence in the mortgage market.
This month alone all but five UK regions have seen increased average mortgage sizes with East Anglia and the North East seeing the largest rises: an incredible 25.87% in East Anglia and 20.28% in the North East. These two large increases are unlikely to indicate a trend, however, so expect a slight correction to bring the figures back towards the norm over the next few months.
It was not all rises in borrowing amounts however, with London, South East, Midlands, Wales and Scotland experiencing drops in average requested mortgage borrowing. Of these, the Midlands and Wales experienced minimal reductions of -0.30% and -1.19% respectively, while the South East and London saw what are likely to be market savvy readjustments in the wake of previous steep increases with a 12.88% drop in the amount people wanted to borrow in the South East and an 11.45% drop in London. Even with these falls, mortgage borrowing remains very high in both the South East where the average loan amount requested is £175,272 and London where the average is still significantly above the rest of the UK at £232,363.
The total numbers of consumers making online enquiries for mortgage advice has also continued to rise in September, with an increase of 7.28% on August’s volumes and a huge 107% increase in year on year figures, again reflecting renewed buoyancy in the market. All regions, with the exception of Northern Ireland, have seen increases in the number of people asking for advice, with the highest increase of 13% in South East England. Northern Ireland’s buck of this overall trend is consistent with the smaller overall size of this region as it invariably receives mortgage requests way below other regions.
Lead prices remain competitive at an average price of £14.86 per lead, a £1 increase on August’s average lead price. The highest lead prices were seen in the South West of England at an average of £16.64 per lead, while the lowest prices were found in Northern Ireland at just £10.00 per lead. Leadbay’s pricing is market driven and therefore set by advisers looking for more business, usually when lead numbers rise then prices drop, as prices have increased a little too it is likely to reflect an upturn in market conditions for advisers and appears to be another sign of renewed confidence in the mortgage market.
There are positive signs of recovery at the moment on both the sides of borrowers and advisers, but this is tinged with a note of caution following the reports of lower lending. At a recent Bank of England inflation briefing in Bristol, the Bank said that they didn’t believe that there would be a double dip recession but that economic conditions would stay rocky for some time to come with a cautious 0.5% growth quarter on quarter. Our figures this month certainly bear out hopes of a recovery and currently it looks like this may continue throughout the rest of the year.
