Mortgages  

Eight out of 10 clients recommended a fixed rate

Eight out of 10 clients recommended a fixed rate

Data from Paragon Mortgages’ latest Financial Adviser Confidence Tracking Index reveals a mortgage market growing in the fourth quarter of 2015, with confidence among financial advisers at the highest levels seen since the onset of the financial crisis.

The fourth quarter of 2015 saw a sharp increase in the average number of mortgages being introduced per financial advisers office, according to the results, which showed this went from 22.7 to 25.2, an 11 per cent increase.

According to Paragon, this puts current business volumes at their highest since 2008.

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Additionally, average mortgage volumes per adviser also increased from an average of eight mortgages per month to 8.3.

Across the fourth quarter of 2015, the overall mix of business being processed by financial advisers also remained largely stable in the fourth quarter 2015.

However, there was an increase in the volume of remortgage business from 33 per cent to 35 per cent.

A preference for fixed rate products became apparent over the fourth quarter with mortgage advisers recommending a fixed rate product to more than eight out of every 10 customers.

Paragon said that this reflected a prudent and cautious approach despite concerns easing over an imminent increase in base rates..

From these products, nearly half - 48.1 per cent - were fixed for two years, whilst around a third - 33.1 per cent - were fixed for five years.

2015 Q4 Business MixSept 2015December 2015
Remortgage 33.1 35.2
First time buyer18.6 18.1
Next time buyer24.6 22.9
Buy-to-let22.7 23.2

John Heron, director of mortgages at Paragon, said: “The latest in our long-running FACT series paints a positive picture of the mortgage market with business volumes up across the board and an overall confidence score the highest it has been since 2008.

“Looking forward an overwhelming majority of financial advisers expect business to either grow or remain stable over the coming quarter.

“Advisers have also seen strong growth in buy-to-let in recent months but it is no surprise that they expect the market to cool a little going forward given the policies being adopted by the government.”

ruth.gillbe@ft.com