Time for a fresh start

The start of a new year has always been a popular time for borrowers to look for a mortgage: as New Year’s resolutions kick in and the Christmas credit card bills land on the mat, there is always a surge in the number of people looking for mortgage advice. This year was no different, as the number ofborrowers rose by 61% compared to the lull of December.

This rise was experienced by mortgage advisers throughout the UK, and even the lowest increase, in the South Central region, saw more than 57% of extra borrowers compared to December, while the neighbouring South West had almost 65% more.

Once again, the Midlands provided the highest number of borrowers with more than 13% of all leads coming from this region. The amount these people wanted to borrow held up well too.

Requested mortgage borrowing dropped by 1.4% from December to January, but is still 4.35% higher than it was last January. The average amount that people wanted to borrow in January was £133,600 down from £135,400 in December. But when you look at an average borrowing of just £127,800, last January, it sets a positive trend for the upcoming year.

Of course, the variations across the country in how much people want to borrow are much more pronounced than the number of borrowers. Bucking the trend, London saw a 6% rise in the size of mortgage that people were asking for compared to December, and this amount was
an incredible 15.7% higher than January 2008, taking the average requested mortgage size in London to £218,160.

Even if some of these are difficult to place, advisers operating here will receive hefty proc fees compared to the rest of the country. As the average lead price for London was also the lowest in the country at just £10.17, return on investment for a lead bought in London, with a proc fee of 0.3% would be in the region of £753 before the cross sales opportunities.

Wales saw the biggest falls in borrowing amounts with a drop of 18% in January compared to December. However in the previous two months Wales had twice seen an uncharacteristic spike in the borrowing amounts, so this month’s figures, although they sound dramatic, are partially counterbalanced by the previous rises.

The good news for mortgage advisers is that with a flood of new clients, the price of leads drops. So not only can you get almost as many new clients as you can handle, but you can get them at reduced prices. With average lead prices at just £10.76 it is a win-win situation.

The outlook for next month is more of the same. The high numbers of borrowers looking for advice we expect to continue throughout February and this will have the corresponding effect on lead prices.

Consumer confidence is growing so with a gradual increase in lending by the banks there should be the opportunity for mortgage advisers to carry out a growing amount of business.