Stephen Smith, Legal & General’s director of housing said: “Confidence had been relatively stable in the first half of this year but has now taken a small dip. Fewer than half of mortgage advisers that we polled feel that business will get better over the next quarter and 15% now feel it will get worse. This may be as a result of the lack of lending (at reasonable rates and realistic loan-to-values) coming through from banks and building societies despite the Bank of England’s continued programme of quantitative easing. Whatever the case, buyer enquiries do not seem to be translating into mortgage sales for brokers, which means that cashflow is challenged.
“The outlook amongst mortgage brokers for the protection market has been dropping slowly all year. In Q1, 62% of advisers thought that their protection sales would improve over the following three months. This was cut to 56% in Q2 and 49% in Q3. Selling mortgage-related protection remains challenging which is why many advisers have become more involved with family and business protection.
“Looking at mortgage business there seems to be ever-increasing signs of a shift towards house purchase transactions and away from remortgage business. The average broker predicts that house purchase will make up 43% of their overall mortgage business, up from 40% last quarter and the highest figure since we started this report in 2008. The exact opposite is happening with remortgage transactions, which are predicted to drop to 40% from 43%. Similarly, this is the lowest predicted figure for remortgages that we have recorded.
“So it seems the pendulum is swinging towards house purchase business but this will not gather momentum until housing transactions pick up, funded by an improved flow of good mortgage deals from lenders.”
