76% of DAs say rate rise would increase remortgage business
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The majority of directly authorised intermediaries expect a potential rise in the Bank of England base rate to have a positive impact on remortgage business, The Mortgage Alliance’s February Distribution Indicator reveals.
When asked how rising inflation rates and a potential rise in the base rate would affect remortgage business in the next three months, 76% of DAs said it would help business to increase.
A further 17% of those asked believe the level of business would stay the same, while 5% stated it would decrease and 2% were uncertain.
The survey also shows 88% of brokers expect the base rate to rise this year.
It portrays a more mixed picture for the remortgaging market over the past three to six months, with 44% of respondents saying lenders’ appetites for remortgaging business were roughly the same over the period, 41% reporting they had increased and 15% saying appetites had decreased.
For DAs that had advised on remortgage business so far in 2011, 64% said fixed rate products had been the most popular or better value deal for their clients, compared to 34% who said the same of tracker rates.
Phil Whitehouse, head of TMA, says: “All in all it appears that the DA intermediaries surveyed feel the remortgage market is one which has shown signs of life in recent months and will continue to grow thanks to a number of market influences.
“It has been predicted by the British Chambers of Commerce that interest rates could rise as soon as May and if this is the case it will have a big effect on the remortgage market and the levels of remortgage business being written by intermediaries.
“Whatever happens it will be interesting to revisit these statistics in six months’ time to see if lenders appetites have improved to match those of intermediaries and how the market has coped with any interest rate increases.”
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