A new study of mortgage brokers has shown that they are particularly optimistic about the buy-to-let market – but concerned about overall lending levels.
The survey of 230 brokers by the Intermediary Mortgage Lenders Association found that the proportion of business by borrower type in the last quarter of last year was 29% remortgages, 28% buy-to-let, 22% next-time buyers, 12% first-time buyers and 5% other business.
In the next quarter, intermediaries are most optimistic about buy-to-let, with 56% expecting to see an increase in this type of business, followed by remortgages (47%) and next-time buyers (34%).
Only 12% of intermediaries expect to see a decline in buy-to-let business. In addition, 81% of intermediaries believe that the buy-to-let market in 2012 will be the same or larger than in 2011, with a significant majority (66%) believing we will see material growth.
First-time buyer business is the area intermediaries are least optimistic about with 22% expecting to see a decline, followed by next-time buyers 15%. Only 30% expect to see an increase in first-time buyer business. Remortgages are the area they expect to be most robust, with just 5% expecting a decline.
When asked about market conditions, most intermediaries remain cautious with 40% expecting conditions to remain the same and almost as many thinking they will get worse (33%) as those who think things will improve (27%). The balance of intermediaries (73%) feel that volumes will either be the same or higher in 2012, compared to those who expect a decline (27%).
John Heron, IMLA chairman, said: “Intermediaries are right to be cautious about their expectations for 2012. Whilst we are seeing growth in the mortgage market, it is a gradual process.
“Buy-to-let is becoming increasingly important as more people move into the private rented sector. For landlords, an intermediary can provide invaluable support during the process of finding the right mortgage and right mortgage lender for their needs.
“The same is of course true of the market in general. Intermediaries are best placed to find a solution for borrowers who return empty-handed from a trawl across the high street lenders. The benefits to the consumer of professional mortgage advice are not always rated highly enough and need to be better communicated.”
Intermediary views on the economy in 2012 were also cautious, whilst on house prices they expect no real movement.
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