Brokers were less confident about the sales market
Remortgaging will be the strongest driver of mortgage intermediary business this year, most brokers said in a study conducted by Paragon Bank.
The survey of over 350 mortgage brokers found that 78% believe that remortgaging will dominate the business over the next 12 months, followed by buy-to-let remortgaging cited by 51%.
A third of brokers (33%) said that interest-only mortgages would be a strong contributor of business during the year as borrowers adjust to a higher interest rate environment. Later life lending and adverse credit mortgages were mentioned by 29% and 28% of brokers respectively as drivers of business.
Meanwhile, intermediaries were less convinced about the sales market in 2023, with less than a quarter (24%) believing home movers would be a significant contributor to business. This figure falls to 23% for first-time buyers and 18% for buy-to-let purchases.
In terms of product popularity, brokers were split on whether borrowers would opt for the certainty of a fixed-rate mortgage or cheaper variable options.
Just under half (49%) believed that five-year fixed-rate mortgages would be the most popular product, with 47% stating base rate trackers or variable products with no early redemption charges would drive business. Around 44% suggested that borrowers would want a two-year fixed mortgage.
“After strong sales markets since the introduction of the Stamp Duty holiday in 2020, brokers now believe the dial will shift and remortgaging will dominate business,” Richard Rowntree (pictured), managing director of mortgages at Paragon Bank, said. “In the owner-occupied market, many borrowers are due to come off two- or five-year fixed rates, while the buy-to-let market saw a significant amount of five-year business written in 2018 due to mature.
“We believe that while buy-to-let house purchases will be slower next year than the previous two years, professional landlords will still be looking for acquisitions. A slower market means they are well-placed to pick up stock, and we know many are keen to add to their portfolios.”
Do you also think remortgaging will be the strongest driver of mortgage intermediary business this year? Let us know your thoughts by leaving a comment in the discussion box at the bottom of the page.
