April distractions dull improving market

Mortgage Solutions

With record sunshine, Easter holidays, school holidays, two Bank holidays and the Royal wedding, it was a great month for relaxing, but not so good for business levels.

I have heard many advisers refer to April as like December with sunshine and, with what seemed like half the country downing tools around 21 April, this was a pretty accurate assessment.

All of these extraordinary factors happening at the same time had a corresponding effect on lead volumes and there was a noticeable dip in volumes across many lead products for the first time in 2011.

In our own marketplace overall mortgage enquiries dropped by around 15% to 20% across first-time buyers, next-time buyers, buy-to-let and remortgage.

There was also a shift in the pattern of enquires. Remortgages were up slightly in April compared to March as a proportion of total mortgage enquiries to just over 54% of leads submitted.

First-time buyer enquiries dropped to just under 21% of all enquiries. Homemovers remained steady at around 17% of enquires, with buy-to-let leads again bringing up the rear, but with an increased proportion of 8%.

Focusing on regional variations in first-time buyer enquiries, there were some interesting trends around the UK. To put the findings into context, across the UK, the average LTV for April was 73.6%, with an average loan value of just under £123,000.

Across all first-time buyer enquiries, over 80% were from prime consumers, with just under 10% sub prime and a further 10% looking to self-certify their incomes. The average age of applicants was 34, which was fairly constant across the UK.

Like many lead providers, we group the 124 postal areas into 13 separate regions - Scotland, Wales, Northern Ireland, North East, North West, Midlands, East Anglia, Home Counties, London, South, South West, Channel Islands and Isle of Man.

In terms of lead volumes, the most popular area for first-time buyer enquiries was the Home Counties with 19% of enquiries. Next was the North West with just over 17% of enquiries followed by the Midlands with 14% and then London with just under 11% of enquires. The South West was the only other region with a share greater than 10%.

Looking at average loan values across the UK, unsurprisingly the area with the highest loan value was London with an average loan size of just over £190,000.

The next highest was the Home Counties at £148,900 followed by the South at £137,100. The region with the lowest loan values was the North East with average loan values of £93,200.

Analysing consumer credit grades across the UK, the highest number of prime consumers as a proportion of leads was Northern Ireland with over 85% of all first-time buyer enquiries from prime consumers, followed by Scotland and then London with 82%. The area with the most sub-prime customers was the North East, followed by the Midlands and then the South West.

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