Mortgage adviser confidence falls on Q4 prospects

Fewer than half of mortgage advisers think business will improve in the last quarter of 2009.

A survey from Legal & General (L&G) finds the majority of mortgage advisers feel less confident about the last three months of 2009 than they did in previous quarters of 2009.

Stephen Smith, director of housing at L&G, says confidence had been relatively stable in the first half of this year but has now taken a small dip.

He says: "Fewer than half of mortgage advisers that we polled feel that business will get better over the next quarter and 15% now feel it will get worse.

"This may be as a result of the lack of lending coming through from banks and building societies. Whatever the case, buyer enquiries do not seem to be translating into mortgage sales for brokers, which means cashflow is challenged."

L&G also says the outlook amongst mortgage brokers for the protection market has been dropping slowly all year.

In Q1, 62% of advisers thought their protection sales would improve over the following three months but this was cut to 56% in Q2 and is now down to 49% in Q3.

Smith says: "Selling mortgage-related protection remains challenging which is why many advisers have become more involved with family and business protection."

L&G also finds the average broker predicts house purchase will make up 43% of their overall mortgage business, up from 40% in the last quarter, and the highest figure since it started its confidence report in 2008.

Smith says: "So it seems the pendulum is swinging towards house purchase business but this will not gather momentum until housing transactions pick up, funded by an improved flow of good mortgage deals from lenders."