Brokers can build on purchase work

19 July 2010

You can prove anything with statistics but it’s worth dwelling on a fairly positive one from LSL Property Services which indicates that housing activity rose 20% in June compared with May, with over 63,000 homes sold last month.

It’s only fairly positive because May was a particularly quiet month, attributed to uncertainty surrounding the general election. Nonetheless, it indicates that the stalemate on price between buyers and sellers has been broken.

LSL says prices fell slightly in June but it expects them to stabilise and normal property market dynamics to emerge. A functioning property market is important for brokers as the low Bank of England base rate continues to stifle remortgage business.

Our research shows that remortgaging accounts for less than 30% of business for nearly half of brokers, and there’s little incentive for borrowers on low SVRs to seek out new deals.

The low base rate is building demand and when rates start to rise there will be a chance for brokers to help clients find new deals.

In the meantime we must remember that rate alone isn’t the only reason for remortgaging and some clients are looking for the security of a fixed rate or to raise finance.

And then there’s there the purchase market. This forms a significant element of broker business at the moment and if conditions continue to improve it could be the bedrock on which they build for the future.

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