Mortgage advisers have seen a significant growth in remortgage business over the past five years, according to the latest research from Paragon Mortgages.
Remortgage activity now accounts for 41 per cent of an intermediary’s business, up from 37 per cent five years ago.
Paragon’s financial adviser confidence tracking index found that there had been a corresponding decline in home mover applications over this period.
These now account for just 21 per cent of intermediary business, down from 24 per cent in the first quarter of 2013.
Paragon says that this sharp drop has been seen over the past year.
Between 2013 and 2017 this figure has remained fairly constant. In the first quarter of each of these years, “next time buyer” mortgages have accounted for 23 to 24 per cent of intermediary business.
However, there has been an increase in first-time buyer mortgage sales, these now account for 18 per cent of intermediary business, up from 16 per cent five years ago.
Paragon says the biggest step-change in first-time buyer mortgage applications followed the introduction of the Help to Buy scheme.
Not surprisingly, mortgage advisers are now doing less buy-to-let business than they were five years ago. Buy to let accounts for 19 per cent of intermediary applications, down for 22 per cent five years ago.
However this figure has risen modestly year-on-year: in the first quarter of 2017 it stood at 18 per cent.
Mortgage customers continued to show a strong preference for fixed rate mortgage products with an overwhelming nine out of 10 (91 per cent) opting for interest rate certainty.
Long-term fixed rate mortgages again proved to be more popular, with intermediaries reporting that 46 per cent of applications for fixed rate mortgage were for an initial term of five years or more. This compares with 42 per cent of applications with an initial term of two years or less.
Paragon’s director of mortgage John Heron says: “Potential home moves are weighing their options carefully at the moment.
“Given the combination of first-time buyer incentives focused on new build property and mixed news on house prices more generally, it appears than an increasing proportion of potential movers are opting to stay put for the time being and lock in an attractive interest rate through remortgaging.”