According to Paragon Bank’s Mortgage Intermediary Insight Report, 74 per cent predict residential refinancing will be a key driver while 56 per cent said buy-to-let remortgages.
This follows data from the Financial Conduct Authority (FCA) which showed sales of remortgages surpassed any other type of home loan in the last quarter of 2021.
Other sources of future business include buy-to-let purchases, with 44 per cent of respondents saying so, while first-time buyers were predicted by 43 per cent of those polled to drive business.
House movers were named as main drivers for the next year by a third of respondents, a third cited later life lending and a fifth said equity release.
Of the average 93 cases completed by brokers each year, respondents said residential mortgages accounted for the largest share, making up just under two thirds of business.
Preparing for refinance push
When asked how brokers will ready themselves for the change in direction for mortgage activity, 41 per cent said they put a greater emphasis on client communication towards the end of a mortgage term. On average, advisers are engaging with borrowers four and a half months before their product matures.
A tenth have streamlined their compliance procedures, and six per cent allocated dedicated advisers to deal with remortgage business.
Remortgage influences
As for the remortgage process, 52 per cent of advisers said borrowers moved to a new lender when their product matured.
Product rate, fees and ease of the application process were deemed to be most important to borrowers, according to the brokers asked. Some 91 per cent cited rate as the key priority for clients, 63 per cent said fees and 45 per cent said ease of process was.
Richard Rowntree (pictured), managing director for mortgages at Paragon Bank, said: “In 2017 the introduction of new underwriting standards made five-year fixed rate mortgages more popular amongst borrowers.
“With many of these loans now maturing, a rise in remortgaging was something we had expected and planned for.
“It is interesting to see that our experience has been shared by our intermediary partners and that many have been putting in place measures to adapt to this shift in business mix. Although rates and fees are unsurprisingly primary drivers behind borrowers’ decisions when remortgaging, we also see that aspects outside of cost, such as ease, speed and service, are also priorities. This highlights the benefit to the sector of improving the maturity and remortgage experience for customers.”
Business breakdown
The report also asked brokers about the makeup of their firms and business performance.
Due to the busyness of the market, a fifth of brokers said their firms were at maximum capacity in terms of the cases being handled. Just over a third said they were at near capacity and 39 per cent said they had spare capacity.
Additionally, a quarter of respondents said their company would be hiring over the next year.
Some 35 per cent said their firms were making a large profit, while 48 per cent reported making a small profit.
The majority of respondents were very or fairly confident about the position of the mortgage industry, the intermediary sector, their own firm and buy-to-let business with more than four fifths of respondents replying positively to questions on each factor.
As for any threats to the market, some 47 per cent were worried about the UK falling into recession and 40 per cent were bracing themselves for a slowing UK housing market.
According to the survey, three quarters of mortgage intermediaries are men and 83 per cent identify as white British. The majority are at least 35 years old, with 24 per cent of respondents saying they were between the ages of 35 and 44, 29 per cent are between the ages of 45 and 54, and a quarter are aged between 55 and 64.
