Brokers confident about 2017 business volumes

Intermediary business sentiment is improving, with more than a third (34%) expecting business volumes to increase over the coming quarter, according to Paragon Mortgages research.

Related topics:  Finance News
Rozi Jones
14th December 2016
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"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 improvement comes despite a reduction in the volume of business being written in Q3, with the data revealing that the number of mortgages introduced per office has fallen from 24.7 in the previous quarter, to 21.8 currently.

On average intermediaries expect a 2.1% increase in business through the next quarter. Asked the same question in Q2 intermediaries expected an average of 0.8% more business.

Sentiment in the buy-to-let market remains mixed however following multiple government and regulatory interventions. The proportion of intermediaries describing landlord demand as ‘strong’ or ‘very strong’ has improved, increasing from 5% in Q2 2016, to 9% currently. However, 46% of intermediaries describe demand for buy-to-let mortgages as ‘weak’ or ‘very weak’, indicating that there is some way to go before sentiment recovers to levels seen prior to recent government announcements on stamp duty and landlord tax relief.

Likewise, nearly half of all buy-to-let business (44%) comprises remortgages, while just a quarter (25%) is for portfolio extension. This figure is down from 26% in the previous quarter, and from 33% in Q4 2015.

John Heron, Managing Director at 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.

“While any improvement in sentiment is to be welcomed, the latest data does indicate that confidence remains muted, especially in the buy-to-let market. 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 properties, this dynamic could lead to reduced supply, higher rents, and put greater pressure on the housing market.”

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