The numbers of consumers going online to request mortgage advice in November has followed the usual seasonal trend and dipped by 16.43% on October’s figures. This is entirely expected as we head towards the Christmas period and consumers put all but the most urgent thoughts of mortgaging on the backburner while they focus on festive preparations for the holiday period.
Come the New Year, we will be inundated with the usual influx of mortgage enquiries as consumers make plans for the year ahead, prompted, as they often are, by an overcrowded Christmas at home or the need to re-arrange their finances following the festivities and fulfil financial plans for the year ahead.
Although enquiries are undergoing the usual seasonal drop, this follows a fairly bumper year of steadily increasing volumes of consumer enquiries, so lead volumes overall remain buoyant.
In fact, this November’s figures are only 5% lower than those in November 2007. As this was pre-credit crunch, it is a good benchmark to show that things have picked up quite significantly this year.
Volumes in all regional areas have followed the month’s downward trend, with Northern Ireland experiencing the largest dip with a mighty 65% drop. That said, we have seen throughout the past few years that Northern Ireland’s comparatively small population makes it prone to huge percentage swings in enquiry numbers with just a relatively small increase or decrease in the number of people asking for advice. Therefore, it is not a representational example of the UK as a whole and is likely to swing upwards by a similar amount in January.
The second largest reduction in enquiry numbers was in Scotland, which saw a 29% drop, followed by London which had a 20% fall. Regional areas less markedly affected by this seasonal lull were South Central and the North West of England, which saw minimal reductions.
Alongside this lull in volumes of enquiries, the average mortgage amounts consumers are asking to borrow also dropped by 6.5% from £132,285 in October to £124,164 in November. This follows a year of generally increasing requested mortgage borrowing, but the fall appears to be a reflection that consumer sentiment is changing and house prices across the UK are softening.
North East England saw the largest dip in requested borrowing with house buyers here asking to borrow 14.8% less than they did last month, reducing the average requested mortgage size to £93,000 from £107,000 last month,
The South Central region also experienced a significant drop of 13.7%, reducing the average requested mortgage to £155,000 from £176,000.
The rest of the UK’s regions saw more modest drops of between 3% and 8%. London was the only region to see an increase in requested borrowing amounts, up 6% to £201,713.
In addition, buyers in every region of the UK other than the Midlands wanted to borrow less than they did for the same period last year. Only the Midlands saw a slight rise of 2%. This could be a strong indication that sentiment toward the mortgage market is getting more pessimistic.
The price that advisers are willing to pay for leads has increased slightly from £14 per lead in October to £15 per lead in November, suggesting adviser demand for new clients is increasing. However, it will also be a symptom of the drop off in consumer numbers.
Again this follows the usual trend for the month of November and reflects an increased number of advisers stocking up their pipeline of business in advance of January, so that they can start the New Year in a positive way.
November has largely followed the predictable seasonal trend marking the beginning of the Christmas slowdown which will continue throughout December. However, January and February are likely to see a flood of new mortgage enquiries and is usually the time of year that advisers can pick up as many new clients as they can handle for the lowest prices of the year.
