Confidence among mortgage IFAs soared to a new peak during the last quarter as the number
of mortgages arranged rose to a new high, reveals the latest Paragon Mortgages Financial
Adviser Confidence Tracking (FACT) Index issued today.
Paragon's quarterly index stood at 135.5 at the end of June. Rising from 121.7 for the first
quarter of the year, this is the biggest single quarter-on-quarter increase since the Index was
launched nearly eight years ago.
The rise is entirely accounted for by the rise in actual business levels, which were up 15%
over the previous quarter, 21% higher than a year ago and 23% higher than two years ago.
Overall, remortgaging accounted for 42% of all mortgage business. The proportion of
remortgages arranged for short-term gain fell to the lowest level ever, at 3.2% – less than a
fifth of the amount remortgaged for short-term gain four years ago.
Today the prime reason for remortgaging is to reduce or control outgoings, up from 22% to
25%. A further quarter is for home improvements and 18% to finance second properties.
At 10%, the volume of buy-to-let mortgages fell slightly from 11% last quarter. Of these
mortgage, just over four out of ten, 42%, were investors making their first buy-to-let
acquisition. Over a third of all buy-to-let mortgages involved investors extending property
portfolios. 16% of the buy-to-let business was re-mortgaging and 6% was for property
John Heron, managing director of Paragon Mortgages, says: “This proportion of buy-to-let
mortgage activity is well balanced. At a tenth of the overall mortgage market, it reflects
precisely the proportion of the private rented sector to the housing market as a whole.”
The Paragon index also showed base rate tracker mortgages continuing to grow in popularity.
They increased market share from 26% to 30%. The rise was mainly at the expense of fixed
rate mortgages, which fell from 26% to 23%.
“This suggests that borrowers believe the low interest rate economy is here to stay but
probably they have already factored in the likelihood of base rate rises of 1% or 2% when they
commit to a
mortgage,” says Heron.