Posted on 29 April 2015 by
When I tell people that the mortgage market is seasonal, often they look at me strangely – how can that be, they ask, if lending is not dependent on the weather? Well, the temperature may have no bearing on lending, but the number of clients buying new homes or buy-to-let investments is, I think, very closely related to whether it’s summer or winter.
From my experience within the mortgage industry, “house buying season” runs from mid-March, with a lull in August for the holidays, to around October. The estate agents that I’ve discussed this with broadly agree, with greater footfall in their branches starting around Easter. This is supported by data from the Council of Mortgage Lenders, confirming that the busiest months for mortgage completions for home movers tends to be in the Summer. In every year in the last five years, quarter three has been the season with the most completions. Allowing for a lead time of between two to six months from first seeing the property to getting through the front door (the average according to my experience) this correlates.
But why is this? After advising on mortgages for over ten years, I am quite certain this is not a coincidence. I reckon, simply, that it’s easier to sell a house when the sun is out and it’s not raining (yes, I know that an English summer doesn’t guarantee either of those). A great number of times I’ve had clients view a house in the evening when it’s dark and want to go ahead, they can change their mind over the weekend, having seen it again in the light. But it’s more than that - people get out more in the summer. They want to explore, and they start to have ideas about cashing in on their two-bed flat in Camden so as to upsize to a four-bed town house in Saffron Walden. More properties come onto the market post-Easter, so clearly the chances of being able to buy increases. This tempts more buyers in, thus the buying circle grows.
I appreciate that none of the above is particularly scientific, but I know that I am definitely busier in the summer than the winter with new enquiries, and I can’t see that changing in the years to come.
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