Mortgage brokers subdued on business prospects

Mortgage brokers’ confidence in business prospects for the next quarter has not improved despite indications the industry may be on the road to recovery, according to the Legal & General Adviser Confidence Index Q4 2009.

Its survey of ARs shows 42% believe business over the next quarter will be flat - broadly consistent with previous surveys in Q2 and Q3.

Nearly a quarter believe the next quarter will be worse; up from from 15% in Q3 and 6% in Q2.

Stephen Smith, director of housing at L&G, says confidence among mortgage brokers has been declining all year but he thinks there is good news around the corner.

He says: "Our message to brokers is ‘keep your chins up or you might not see the business that is out there!' We are in discussions with lenders all the time and there is a feeling in general that the industry may have turned a corner.

"We believe that there are plenty of things to be positive about, what with house prices showing a mini recovery, absent lenders potentially looking to come back into the market and more products at higher loan-to-values.

"In addition, there is a lot of interest in the commercial market, the buy-to-let market is showing signs of growth for the first time in a long time, and house builders such as Persimmon are generally quite bullish."

He says house purchase business has been taking an increasing share of mortgage brokers' business, representing a predicted 50% over the next three months. This compares to a forecast of just 19% this time last year.

L&G says remortgage business continues to be thin on the ground but it will return in a big way when it does come back.

Smith adds: "This begs the question as to what preparations brokers are doing in order to keep the clients that they have already got.

"We would encourage brokers to start reviewing their books, identifying people on standard variable rates without tie-ins and making lists of prospects to call when the time is right."