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Majority of borrowers now using advisers

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15/05/2013
More than half of all borrowers chose to arrange their mortgage via an adviser in the first quarter of this year.
Majority of borrowers now using advisers

According to the Council of Mortgage Lenders (CML), roughly 55% of first-time buyers sought mortgage advice in Q1, while 52% of remortgagors used an intermediary to arrange their deal, up from 45% in Q4 2012.

First-time buyer activity in general stayed strong in March with numbers up 20% month-on-month helping push up house purchase lending. Remortgage lending also increased compared to February but remained flat over the first quarter.

Average affordability has improved 0.8% for all borrowers year-on-year but is being felt in the first-time buyer sector particularly. First-time buyers borrowed 19,100 or £2.4bn of loans in March, up from 15,900 loans in February. First-time buyer lending this quarter fell just short of March ast year despite the Stamp Duty lending spike with 50,900 loans advanced in Q1 2013 against 51,200 loans in Q1 2012.

Overall, lending to home movers increased in March to £3.8bn, up 11% from February, however on a quarterly basis lending is down year-on-year from 71,600 last year to 65,300 in Q1 this year.

As is typical, lending rose in March with 42,000 house purchase loans worth £6.2bn marking a 15% rise on February lending, although remortgage levels remain low.

Paul Smee, director general of the CML, said: “More borrowers are taking out higher loan-to-value mortgages than any other time in the last four years – a sign that lenders are open for business, and that borrowers, even those without a large deposit, are increasingly able to get a foot on the property ladder.”

Ben Thompson, MD Legal & General Mortgage Club said it was no surprise to see more borrowers acting via brokers in Q1.

“Our expectations are that we should see a further increase as the year progresses. This increase will reflect the leap in FTB activity and the fact that typically FTBs will seek the service of an intermediary more so than an existing homeowner would.”

He added: “Lenders also have a lot to do to ready themselves for MMR and no doubt this will have been a contributory factor as well.”

Sophie Hall, head of intermediary at Avelo, said: “The biggest factor in strengthening activity has been the renewed confidence of the man on the street. With the UK avoiding a triple dip, and house prices climbing, homebuyer demand is hardening.”

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