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In Focus Consumer Credit Bouncing back?


The house-buying market has started to rebound as pent-up interest plays through


Melanie Spencer Head of MCI Mortgage Club


Our latest analysis of mortgage activity over July and August has revealed 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.


Robust Illustrating just how robust the UK mortgage market is, 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. The figures for the year put into relief


just how remarkable July and August were this year, a time that would normally see values fall away as competition diminishes when people go on holiday. 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 data highlights the different trends


and activity both within the mortgage market and brokers’ business. During July and August, case activity by advisers and administrators continued


October 2020


Surprisingly diary appointments with brokers for protection products fell by 9% following continued growth since the beginning of lockdown. The fall in protection demand is all the


more surprising given the risk of redundancy brought about by the Covid-19 lockdown; where one would have expected to have seen an increase in demand for income protection products.


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


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.


Appointments Our 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.


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Pent-up demand 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 clearly 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. 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. CCR


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