NMGs Mortgage Intermediary Census has revealed a sharp drop in confidence levels of advisers, on the back of growing expectations of an increase in the Bank of England base rate.
NMG has been tracking business confidence levels since the launch of Mortgage Intermediary Census in April 2005.
Confidence levels peaked in February 2006 when 53% of respondents were more confident / very much more confident in the prospects for their business over the next year and 48% more confident / very much more confident in the prospects for the mortgage market as a whole.
At the same time, 51% were forecasting that there would be a fall in base rates within three months with just 12% forecasting an increase.
However, Mays results show confidence levels have fallen steeply with 38% now more confident / very much more confident in their business prospects and 33% more confident / very much more confident in the prospects for the mortgage market as a whole.
This has coincided with a turnaround in views on base rates with 52% now expecting the next move to be upwards and just 5% expecting a cut in rates in the next three months.
David Burns, director of NMG Financial Services Consulting, says: These results illustrate that confidence is very fragile.
The recent noises coming out of the Monetary Policy Commission have clearly filtered through to mortgage advisers who are concerned about the potential impact of a rate rise on their business.
The research was conducted by NMG during 2006 through Mortgage Intermediary Census, a monthly survey supported by the Association of Mortgage Intermediaries, which interviews 200 mortgage intermediaries each month.