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Broker business confidence improving, says Paragon

Mortgage brokers’ confidence in their future is improving after several low months, according to Paragon Mortgages.

The finding comes in Paragon’s latest financial advisors confidence tracking index report, based on interviews with around 200 mortgage intermediaries.

The pick-up on confidence comes despite falling business levels in the third quarter, with the survey showing that the number of mortgages introduced per office has fallen from 24.7 in Q2 to 21.8 currently.

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There has also been a corresponding fall in the average number of advisors per office, from 3.7 in Q2 to three currently.

Broker confidence about future business has shown some improvement however, following a summer of uncertainty created by government interventions in the buy-to-let market, and Britain’s vote to leave the EU.

Asked how much mortgage business they expect to complete over the coming quarter, more than a third of intermediaries (34 per cent) said they expect to do more business, compared to 7 per cent who expect to do less.

On average intermediaries expect a 2.1 per cent increase in business through the next quarter.

Asked the same question in Q2, intermediaries expected an average of 0.8 per cent more business.

But buy-to-let sentiment is mixed, following multiple government and regulatory interventions.

The proportion of brokers describing landlord demand as ‘strong’ or ‘very strong’ has improved, increasing from 5 per cent in Q2 2016, to 9 per cent currently.

However, 46 per cent of intermediaries describe demand for buy-to-let mortgages as ‘weak’ or ‘very weak’, indicating that there is some way to go before sentiment recovers to levels seen before Government tax changes.

Paragon Mortgages managing director John Heron says: “While any improvement in sentiment is to be welcomed, the latest data does indicate that confidence remains muted, especially in the buy-to-let market.

“Although intermediaries are reporting an increase in demand from landlords, a growing proportion of this demand is for remortgages and buy-to-let purchases remain at low levels.”

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