Analysis: Speculation leads to accumulation

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The latest figures from the Council of Mortgage Lenders prove the strength of the summer recovery. Gross lending of £22bn in July – up 14 per cent year-on-year – shows a continued and growing demand for mortgage finance particularly as we move closer to the anticipated base rate rise.

Part of this increase is due to a notable rise in remortgages, which bears out our experience over the past couple of months with remortgaging in June up by 34 per cent year-on-year. The continued speculation about rate rises seems to be having the effect that some intended, with the Bank of England and the FCA presumably wanting more borrowers on fixed rates to reduce the perceived personal exposure of variable products.

For brokers there is an interesting conundrum here because, overall, the ‘value proposition’ may still lie in tracker and discount rates.

Weighing up critical factors such as cost savings versus rate certainty is a good problem to have because it means consumer demand for advice is there, the market remains competitive and lender appetite is strong. 

Advisers are in a position that they have waited many years to regain – so grasp the opportunities.