Mortgage brokers predict business increase
FACT, a panel-based survey of mortgage brokers, found that, on average, advisers expect to do 6.7% more business in the fourth quarter than in the third. This is the third quarter in a row that brokers have predicted an increase in mortgage business and follows a negative 2008 when the intermediary market, on average, predicted contracting levels of business.
Overall, 55% of brokers expect to see an increase in business in the three months to the end of the year, with 37% expecting business levels to remain stagnant in the period. Just 8% of respondents expect falling business levels over the same period.
Of business conducted in the third quarter, owner-occupied accounted for over three quarters (78%) of brokers’ mortgage business. Buy-to-let accounted for 12% of business, with ‘other’ types of mortgage accounting for 10% of business. Of the owner-occupied mortgage business, 26% of mortgages were for next-time buyers, whilst remortgage levels continued to decline, falling from 45% in the second quarter to 44%. Next-time buyers have grown steadily over the past year, reflecting increased activity in the housing market. First-time buyer levels remained steady at 11%.
John Heron, Paragon Mortgages’ managing director, commented: “This is the third quarter in a row that brokers have said they expect business levels to increase and the sense of pessimism that surrounded the market in 2008 finally appears to be dissipating. General housing market activity is picking up, although purchase levels still remain at historical lows, and we are seeing some easing of mortgage criteria in the owner-occupied market, with less stringent LTVs and fees.
“It is interesting that next time buyer business is increasing as this is the sector that has decided to sit tight during the recession, preferring to stick with what they have rather than take the risk of purchasing a new property. However, there needs to be more of an upturn in the level of first-time buyer activity before we can start to say that the market is really on the road to recovery.”