The specialist lender’s quarterly Financial Advisers Confidence Tracking survey, which highlights intermediaries’ views on the performance of the mortgage market, revealed three customer groups that intermediaries believe have been particularly adversely impacted by the changes which have taken place in the market following the implementation of the Mortgage Market Review. These groups were: people borrowing into retirement; people wanting interest only mortgages; and people with irregular incomes - with more than 90% of the 186 respondents (in each case) stating this.
During Q3 the average number of mortgages introduced by intermediaries was 22, which was down 3% on the second quarter. Nevertheless, compared with Q3 2013, this shows a 12% increase in the average number of mortgages introduced. This, however, was significantly lower than the 30% year-on-year increase seen in Q2.
Intermediaries appeared more positive about the buy-to-let market in Q3, with nearly a quarter (24%) of all mortgages introduced being buy-to-let mortgages, showing a modest increase from 23% in Q2.
In particular, 43% of intermediaries surveyed thought the availability of buy-to-let finance had improved since Q2, showing a significant increase (7%) over the period from 36%. In addition, only 8% of intermediaries stated the availability of buy-to-let finance had deteriorated, compared with 12% in the previous quarter.
John Heron, Managing Director of Paragon Mortgages, said:
“The market has seen significant structural changes following the Mortgage Market Review. This is a result of both the regulations themselves and the way the lending industry has responded to them.
“This could be one factor behind the softer levels of business that intermediaries are reporting in the third quarter.
“CML data shows us that buy-to-let lending was up 14% in Q3 compared with Q2, and up 24% on Q3 2013, which could suggest that the buy-to-let market is proportionally more important for lenders in the current market.
“A healthy availability of buy-to-let finance is significant to maintaining a competitive and high quality Private Rented Sector, so it is pleasing to see increased confidence amongst intermediaries, for this type of business.”
