Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Mortgage purchase values rise, but remortgage value falls

Mortgage values rise

The average mortgage value for purchases has risen 12.4% to £230,768, while the average remortgage value has dropped 11.11% to £166,954

MCI Club’s latest analysis of mortgage activity over July and August has found that, despite Covid-19, the average mortgage value for purchases is up 12.4% compared to the same period in 2019.

Average mortgage purchase values have risen from £202,058 at the end of August 2019 up to £230,768 now. At the same time the average remortgage value has dropped 11.11%, down to £166,954.

The data brings together data from MCI Mortgage Club and eKeeper’s customer relationship management (CRM) system.

The analysis for the year from January until the end of August shows an average growth of 4.46% for purchase mortgages, compared to the same period last year, but a trending decline of 3.7% for remortgage values across the year so far.

July and August saw a return to normal service for purchase mortgages. This followed the announcement of the stamp duty holiday and the release of pent-up demand after a slump in purchases in April and May due to the three months of lockdown. While remortgage values were down, purchase volumes consistently crept above for the first time since the peak of remortgages in April.

The combination of data from MCI and eKeeper highlight the different trends and activity both within the mortgage market and brokers’ business. During July and August, case activity by advisers and administrators continued to grow, matching 2019’s figures and remaining steady during ‘holiday dips’ over August, with an average of 55,000 case interactions per week compared to 46,700 in August last year.

eKeeper’s CRM system recorded the number of diary appointments brokers made with clients wanting mortgage products. This continued to rise above historical averages by 3% in July and August. Diary appointments with brokers for protection products fell by 9% following continued growth since the beginning of lockdown.

Melanie Spencer, head of MCI Mortgage Club, said: The stamp duty holiday, together with pent-up demand following the national lockdown, certainly appears to have stimulated the market and our downstream figures indicate that rising property prices are being driven by an increase in demand to move home. These demand factors are paired with the low cost of borrowing but a limited supply of high LTV products. We know that lending criteria is tightening so not all demand is being met, but brokers still continue to service their clients within challenging market conditions.

Mortgage appointments provide comfort that brokers are building a pipeline of activity into the Autumn although a drop in appointments for protection emphasise the need for brokers to proactively contact their clients about this vitally important area of business, she said.

Spencer said, appointments are a combination of new and existing customers with many appointments generated automatically within eKeeper before any deal end date. This comes at a time where remortgaging and low interest rates affords a prime opportunity to engage. Of course, protection is about more holistic advice outcomes for consumers, especially vital during these rocky times. Here the MCI Club can assist advisers through our qualified panel and other support services.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.