TMA’s February Distribution Indicator shows that over three quarters of directly authorised (DA) intermediaries expect rising inflation and the potential of a Bank of England base rate rise to have a positive effect on remortgage business over the next three months.
The questions generated in TMA’s February Distribution Indicator focused on DA’s attitudes to the remortgage market and its influencing factors.
When asked the question; how do you expect influences such as rising inflation rates and the potential knock on effect to the Bank of England base rate to affect remortgage business in the next 3 months, 76% said these factor would help remortgage business to increase.
17% believed that it would stay the same, whilst a mere 5% stated that it would decrease and 2% expressed their uncertainly.
When looking specifically at the Bank of England base rate the vast majority 88% expect it to rise this year with only 5% anticipating no rise. 7% were unsure as to whether there would be any movement in either direction.
Results from the survey were mixed when assessing lender’s appetites for remortgage business over the past three to six months. 44% of respondents felt that lending appetites were roughly the same; 41% suggested that they had increased whilst 15% suggested that lending appetites had decreased.
For those directly authorised intermediaries that had advised on remortgage business so far in 2011 almost two thirds (64%) pointed out that fixed rate products had been the most popular or better value product for their clients. 34% highlighted that tracker rates had been the most popular or better value product for their clients and 2% stated other when questioned.
The TMA Distribution Indicator is part of a strategic gathering of feedback and views in regard to current market conditions undertaken by the TMA mortgage desk.
A cross section of extensive interviews takes place over the course of a month and the responses are gathered to highlight any potential fears, opening or developments in the market which TMA will look to address in the future.
Phil Whitehouse, Head of TMA, commented:
“All in all it appears that the directly authorised intermediaries surveyed feel the remortgage market is one which has shown signs of life in recent months and will continue to grow thanks to a number of market influences.
"It has been predicted by the British Chambers of Commerce that interest rates could rise as soon as May and if this is the case it will have a big effect on the remortgage market and the levels of remortgage business being written by intermediaries.
"Whatever happens it will be interesting to revisit these statistics in six months’ time to see if lenders appetites have improved to match those of intermediaries and how the market has coped with any interest rate increases.”
