Research by L&G revealed that 34% of brokers surveyed believe business will get better in the coming quarter, compared to over 50% in Q1. The majority of brokers (54%) predict sales will be flat in Q3, while 12% expect things to get worse.

Nevertheless, the 122 brokers polled expect house purchase mortgages to make up 51% of their sales in the next quarter, the highest level seen since the index began in 2008.

By comparison, remortgage business is expected to be 31%, the lowest level recorded since the start of 2008.

Stephen Smith, director of housing for L&G, said “interest rate hawks” are gradually increasing in number, with 14% of advisers forecasting an interest rate rise within the next three months.

Smith said: “The Bank of England believes 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.

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“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.”

Despite the lack of optimism in business levels, 42% of brokers said they expect protection sales to improve in the coming quarter.