Mortgage purchase values see annual rise of 12%

Rozi Jones
15th September 2020
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"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."

Despite Covid-19, the average mortgage value for purchases rose by 12.4% in July and August compared to the same period in 2019, according to data from MCI Club.

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

The picture 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.

MCI says 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.

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 also 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. Surprisingly, 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, commented: “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.

“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.”

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