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Mortgage adviser business volumes hit record high

Mortgage adviser business volumes hit record high

Mortgage advisers’ business volumes hit a record high in the second quarter of this year, up 7 per cent thanks to a swell in first-time buyers, according to the Intermediary Mortgage Lenders Association.

Individual brokers each placed an annual average of 95 mortgages between April and June, up from 89 between January and March.

This is the highest ever average of successful mortgage applications worked on by mortgage advisers annually since the Imla began tracking the figure back in 2016.

“We have seen advisers’ confidence levels and average business volumes increasing to some of the highest recorded,” said Kate Davies, IMLA’s executive director.

Imla found 98 per cent of intermediaries reported feeling either ‘fairly’ or ‘very’ confident about the outlook for the UK’s mortgage industry.

One reason for the uptick in business was down to first-time buyers, which made up 23 per cent more of mortgage application volumes in Q2 compared to 20 per cent in Q1.

The trade body credits this rise to the growing return of smaller deposit products, as more lenders flesh out their 95 per cent loan-to-value mortgage ranges after the turbulence of 2020.

Experts have since speculated these products could be in the running for some rate cuts, which would further boost the number of first-time buyers on advisers’ books.

Davies is cautious when it comes to business performance in the second half of 2021. “We may see a softening in purchase activity in the second half of 2021 in line with slowing government support,” she said.

“But advisers should feel spurred by the sizeable refinance market at play and a growing reliance on mortgage advice among those who have seen their financial circumstances complicated by the pandemic.”

Chris Sykes, an associate director and mortgage consultant at Private Finance, said with mortgage rates at record lows, his firm was “seeing a large increase in enquiries from existing clients looking at their remortgage options”.

This is in spite of early repayment charges. “While these can be sizeable, the sub-1 per cent rates on offer represent a significant saving over the life of a mortgage product.”

Moneyfacts data has also highlighted the steep standard variable rates facing borrowers who are coming to the end of two and five-year fixed rates this year.

Borrowers coming to the end of a two-year fixed rate deal from 2019 could be facing a hike of 1.91 per cent if they revert to an SVR, rather than switching to a new mortgage.

In addition first-time buyers, which accounted for just under a quarter of brokers’ Q2 business, a further 26 per cent of applications were related to buy-to-let customers, and 7 per cent were specialist.

This is in spite of reports a rising number of BTL investors are considering exiting their portfolios, and are sitting on the properties they currently own.

Imla's figures are based on 300 interviews with mortgage intermediaries which have placed at least 24 mortgages in the last year.

ruby.hinchliffe@ft.com