Based on IMLA’s latest survey of intermediaries, almost half (49%) of all mortgage cases introduced were remortgages – an increase from 48% at the time of the previous survey. Intermediaries expect to do 2% more remortgages in the coming two months. Lenders agree that remortgaging activity will grow, with 72% of them expecting volumes to be higher or much higher over the next quarter.
This growth in remortgaging comes at the expense of, particularly, home mover and first time buyer business. Home mover mortgage business has contracted from 23% to 20% over two months, although first time buyer loans increased slightly from 10% to 11%, according to brokers.
For their part, 78% of lenders predict first time buyer business will be slightly or much lower over the next quarter, and 61% expect similar declines for home mover loan business.
As for buy-to-let, intermediaries say it has held steady since the previous survey (at 18%) but they do expect a small decline of 1% in the future. The majority of lender respondents said buy-to-let would remain stable, although a minority indicated it would ease slightly.
The overall picture is of a market that is expected to contract in 2008, with lenders expecting that volumes will be 11% lower in 2008 than in 2007. Intermediaries are rather less gloomy, predicting a reduction of 6% year on year.
Notwithstanding the current difficult conditions, latest CML figures (for Q1 2008) show mortgage business originated through intermediaries holding up well, with 83% of first time buyer loans (by value) and 79% of remortgages being booked through brokers, up from 79% and 74% respectively the previous quarter. Home mover loans rose from 61% to 64% over the quarter.
