A new Mortgage Market Tracker report has revealed 47% of all enquiries to intermediaries resulted in completion during the period of July to September. The report also shows that 67% of initial enquiries ended up being full applications, with 83% of those receiving an offer from the mortgage lender. The report also notes that a massive 84% of those offers went on to achieve completion.
A New Tool For Analysing Mortgage Trends
The Mortgage Market Tracker will assess trends over each quarterly period, monitoring the amount of enquiries and how many continue on through the process and how many drop out. The Tracker will calculate how many result in lending offers and applications, as well as the completion and drop out rates. It will also attempt to identify the reasons behind the drop outs.
So far, the Tracker has identified that most drop outs occurred quite early on in the process with 33% of borrower enquiries failing to result in an official application. Lender declines contributed to 27% of all drop outs, with the remaining 73% consisting of broker or client withdrawals. With the average industry conversion rate being 67%, larger firms and lone traders were noted to be outperforming everybody else by clocking a 70% conversion rate of enquiries into applications. It is the sole traders who are performing the best though, with applications from borrowers receiving offers at a rate of 87%, 6% up on the average, with a completion rate of 88%, 4% up on the average.
The highest rate of drop outs due to lender declines were found to be from the smaller firms (those with eleven employees or less), where the drop out rate was at 35%, which is 8% higher than the industry average.
Good News for Borrowers
The Market Tracker is report is owned and published by Intermediary Mortgage Lenders Association (IMLA) and they intend to publish its analysis quarterly, helping both lenders and especially borrowers stay aware of developing trends which could make the difference to an application receiving an offer and being completed or not. There is only the one report so far, but eventually the fluctuating trends will be able to be analysed over the course of several quarters and even years.
The Executive Director of IMLA, Peter Williams, said, “The intermediary channel has never been more important to the UK mortgage market, with consumers and lenders both increasingly relying on brokers to match individual needs to suitable products. Regulatory changes have brought new assessments and criteria to contend with, but this data suggests the majority of applications are getting the green light. It also shows that brokers are playing an invaluable role in the earlier stages by assessing borrowers’ circumstances and providing realistic advice and recommendations.”
It’s certainly good news that most applications are getting the go ahead as this will inspire confidence in the industry, which hasn’t been particularly strong over recent years. But this Market Tracker report will certainly help keep everyone aware of the trends of the mortgage market which in turn can help potential borrowers make more informed decisions about the best time to make enquiries and applications.
