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Bright start to the year fades

Mortgage advisers are more pessimistic about the future, particularly remortgage business.

30 June, 2010

This according to Legal & General Adviser Confidence Index Q2 2010.

Stephen Smith, Legal & General's director of housing said: "Around a third of mortgage advisers think that business will be better over the next three months as the previous quarter, but this figure has dropped and advisers are slightly more pessimistic this time around.

"Looking at the split between house purchase and remortgage business, advisers expect house purchase mortgages to represent an average of 51% of their sales over the next quarter. This is the highest level since the index started at the beginning of 2008. Remortgage business is forecast to be about 31% - the lowest level since the start of 2008.

"Interest rate hawks are gradually getting more prevalent, with 14% of advisers now expecting an interest rate rise within the next three months. The Bank of England believe that the recent rise in inflation is a temporary spike but it must be said that there is now more lingering doubt around how quickly inflation will drop. Some commentators have been flagging the inevitability of increases in the base rate for some time and the recently published inflation figures bring this sharply into focus.

"The attitude towards protection sales is reasonably positive, in that 42% of advisers believe that sales will improve over the coming quarter. The Q1 2010 ABI Savings and Protection survey shows which products people would consider taking out in the future and Life Insurance came top at 13% followed by critical illness cover at 8%. According to the ABI, life insurance is typically the most commonly held product, owned by 46% of working respondents on average. This is followed by critical illness (16%), mortgage payment protection insurance (15%) and private medical insurance (15%)."

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