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Broker confidence improving, says Paragon study

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  • 14/12/2016
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Broker confidence improving, says Paragon study
Sentiment among intermediaries is improving, the latest Financial Advisers Confidence Tracking Index Report from Paragon Mortgages has revealed, though brokers are downbeat on the prospects for buy-to-let.

More than a third of mortgage intermediaries said they expect to do more business over the coming quarter, while just 7% said they expected to do less. On average brokers expect a 2.1% increase in business through the next quarter, which is up from the 0.8% increase brokers forecast back in Q2.

This improved outlook comes despite the fact that the amount of business written in Q3 has fallen. The study found that the number of mortgages introduced per office had fallen from 24.7 in the previous quarter to 21.8 currently. The average number of advisers per office has also fallen, from 3.7 to 3.

John Heron, managing director of Paragon Mortgages said: “While there has been some seasonal reduction in business volumes among intermediaries, there has also been a definite improvement in sentiment about likely future business. This comes on the back of a summer of uncertainty in the property market, and the economy more generally, following the vote to leave the EU.”

However, brokers were pessimistic on the outlook for the buy-to-let sector. Almost half of brokers described demand for buy-to-let mortgages as ‘weak’ or ‘very weak’. What’s more, just a quarter of buy-to-let business was for expanding portfolios, down from 26% in the previous quarter and from 33% in the last quarter of 2015.

Heron added: “Although intermediaries are reporting an increase in demand from landlords, a growing proportion of this demand is for remortgages and buy-to-let purchases remain at low levels.

“At a time of high demand for Private Rented Sector (PRS) properties, this dynamic could lead to reduced supply, higher rents, and put greater pressure on the housing market.”

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