Directly authorised brokers (DAs) expect improved remortgaging business during the next quarter.
TMA’s February Distribution Indicator suggests that over three quarters of DAs expect rising inflation and the potential of a Bank of England base rate rise to have a positive effect on remortgage business over the next three months.
When asked the question ‘how do you expect influences such as rising inflation rates and the potential knock on effect to the Bank of England base rate to affect remortgage business in the next three months’ 76% said these factor would help remortgage business to increase. 17% believed that it would stay the same, whilst a mere 5% stated that it would decrease and 2% expressed their uncertainly.
When looking specifically at the Bank of England base rate, 88% expect it to rise this year with only 5% anticipating no rise. 7% were unsure as to whether there would be any movement in either direction.
Meanwhile, 44% of respondents felt that lending appetites were roughly the same over the past three to six months 41% suggested that they had increased whilst 15% suggested that lending appetites had decreased.
For those DAs that had advised on remortgage business so far in 2011 64% pointed out that fixed rate products had been the most popular or better value product for their clients. 34% highlighted that tracker rates had been the most popular or better value product for their clients and 2% stated other when questioned.
Phil Whitehouse, head of TMA, said: “All in all it appears that the directly authorised intermediaries surveyed feel the remortgage market is one which has shown signs of life in recent months and will continue to grow thanks to a number of market influences. It has been predicted by the British Chambers of Commerce that interest rates could rise as soon as May and if this is the case it will have a big effect on the remortgage market and the levels of remortgage business being written by intermediaries.