Confidence among specialist financial advisers and mortgage brokers almost rivalled an all-time high at Christmas, reveals the Paragon Mortgages Financial Advisor Confidence Tracking Index.
The Index reached 135.3, only marginally lower than the eight-year high of 135.5 reached in the second quarter of 2002.
Buy-to-let mortgages rose from 9.2% to 10.5%. Of these, 41% were arranged to extend the portfolios of experienced buy-to-let investors.
However, the number of mortgages arranged for landlords entering the market for the first time fell dramatically from 39% to 32%.
John Heron, managing director of Paragon Mortgages, says: “The fact that more experienced landlords are stepping up investment in rental property while fewer novice landlords are entering the market demonstrates the maturity of the buy-to-let market. We also know from other Paragon surveys that professional landlords are buying more modestly priced properties to maximise rental returns.”
Overall, the number of mortgages arranged by financial advisers during the fourth quarter of 2002 was up 4% on the previous quarter. That is 15% more than the number arranged a year ago and 31% more than it was two years ago.
Nearly half of all mortgages arranged by financial advisers were remortgages. This rose from 44% to 47% over the quarter, to reach the highest level for remortgaging for two years.
The proportion of remortgages arranged for short-term gain has been declining since 1998 and the latest quarterly figures confirm that this is a continuing trend.
Heron says: “These figures continue to show that the majority of borrowers are conservative and cautious. On the whole, borrowers are not remortgaging to finance excessive spending.”
Fixed rates saw a surge in popularity, rising from 22% to 25% of all mortgages arranged in one quarter. Discount rates showed a decline in popularity, falling from 39% to 37% and tracker rates experienced a slight decline, down 1% to 29%.
The FACT Index shows financial advisers starting the new year with expectations of a 2.8% rise in mortgage business during the first quarter.