Europeans will use the Net to originate half a million mortgage loans in 2003 — some five percent of total new mortgages. This will triple by 2008 to €230 billion of gross new online lending, spurred by growth in the UK and the Nordics, according to a new brief by Forrester Research (Nasdaq: FORR).
“Gross new Internet-originated mortgages will grow from 495,000 in 2003 to 1.6 million in 2008 — equivalent to some €230 billion,” said Forrester Analyst Charlotte Clark. “European leaders like INTERHYP in Germany are seizing the opportunity, reporting 400 million euros in online mortgages — equivalent to some 2,000 loans — in the first half of 2003 alone. Significantly, remortgagers — who outnumber first-time buyers among Net mortgage applicants by three to one in markets like the UK and the Netherlands — are the key contributors to this growth.
“The UK will account for the highest number of new Internet-originated mortgage loans in 2003 — some 126,000 applications — driven by the successes of firms like Charcolonline, which claims to accept 10 percent of the UK’s online mortgage sales already. The number of UK Internet-originated mortgages will grow to twice that of the next largest market — Germany — by 2008, spurred by a much higher proportion of owner-occupied homes in the UK than in Germany.”
Internet-originated mortgages account for more than 10 percent of all gross new mortgage loans in Sweden, Norway, and Finland in 2003, a higher proportion than in any other European market and twice the European average. Aggressive mortgage institutions lead the field in northern Europe — for instance, SBAB in Sweden takes up to 60 percent of all new mortgage applications through the Net.
Forrester modeled the past five years’ supply and demand for Internet-originated mortgages — defined as completed and successful Internet mortgage applications that result in a sale even if the process is finalized via another channel — in 17 European countries. We then extended the model to forecast the number and value of mortgages that will be originated online from 2003 to 2008. The forecast is a bottom-up model, based on Forrester’s Consumer Technographics® Europe data, and cross-checked against top-down inputs from industry and company sources.