Mortgage brokers predict strong end to 2009

Mortgage intermediaries expect 2009 to end strongly, with business levels increasing in the fourth quarter of the year.

Paragon Mortgages’ Financial Adviser Confidence Tracker (FACT) Index has revealed that mortgage advisers believe that they will do 6.7% more business in Q4 than Q3.

Advisers have now predicted a rise in business for three quarters in a row, in sharp contrast to 2008 when they forecast successive quarters of falling business levels.

More than half (55%) of mortgage advisers anticipate more business in Q4 2009, 37% expect a levels to remain static and just 8% expect a decrease.

Advisers said that say that owner-occupied mortgages will account for the majority of their business (78%), with buy-to-let making up 12% of transactions and ‘other’ accounting for the remaining 10%.

Of the owner-occupied mortgage business, 26% of mortgages were for next-time buyers, while remortgage levels continued to drop off, falling from 45% in the second quarter to 44%.

Next-time buyer numbers have grown steadily over the past year, reflecting increased activity in the housing market.

First-time buyer levels remained stable at 11%.

John Heron, Paragon Mortgages’ managing director, said:

"This is the third quarter in a row that brokers have said they expect business levels to increase and the sense of pessimism that surrounded the market in 2008 finally appears to be dissipating.

"General housing market activity is picking up, although purchase levels still remain at historical lows, and we are seeing some easing of mortgage criteria in the owner-occupied market, with less stringent LTVs and fees.

"It is interesting that next-time buyer business is increasing as this is the sector that has decided to sit tight during the recession, preferring to stick with what they have rather than take the risk of purchasing a new property.

"However, there needs to be more of an upturn in the level of first-time buyer activity before we can start to say that the market is really on the road to recovery.’"