I do not know of anyone who doesn’t look things up on the web for that ‘one off’ purchase, before going shopping for it or indeed buying it online. Whilst there is little buying online currently, in the Mortgage arena, the activity in looking up details and doing some research before contacting a broker or a lender has increased enormously. This increase has led to more information being available about what prospective borrowers are thinking and doing than at any time before.
The majority of statistics and information I see around mortgage lending and activity appear, to me, to be retrospective, i.e. last month we lent X, but gives little or no guide as to what we expect to happen next month. Analysing the online behaviour of those searching for a mortgage can provide a huge insight into future demand trends.
Industry experts often say; we lent more this month than last, therefore, next month we will lend even more. When it does not happen, there is a ‘downturn’ in the market and if it does happen it is called a ‘boom’. Forgive me, but if I look at statistical data around consumer activity, i.e. what consumers are searching for, the volume of those searches, data input to return searches; I can take an informed view as to what will happen regarding lending in the shorter term.
What has been ‘lent in a month’ tells us exactly that, simply the past. If we want to know what will happen to lending, we need to look at consumer activity now, as this is likely to lead to action and lending in the future. Using this data, in an informed way, can help with more predictable lending and informed market intelligence. Each market participant monitors their own site and makes assumptions based on their traffic and activity but appears to give little thought to the hundreds of comparison sites the consumer most likely visited before going to their site!
When lending to first time buyers started to increase this was in the media and on the news two months after that activity had been spotted online. There had firstly been an increase in searches for new mortgages, i.e. not remortgages, the income levels given by site visitors began to lower and higher loan to value searches were being conducted, all signs of an increase in first time buyer activity, yet it took two months, as these searches turned into loan activity, before the majority of the industry knew of this.
We all know, even with current data regarding what is going on online now, the public and their behaviours can be a mystery, but in my view, it certainly gives a better insight and may lead to less conflicting information.
Market analysts really should be using all the tools available to understand the market and their customers. It never ceases to amaze me that some are not. Those that do, give direction and insight whilst others give speculation and assumption. I implore all interested parties to get it right, do real research and let us have factual and informed discussions around activity in the market place.
