IMLA, the industry body for lenders who market their products primarily through intermediaries, carried out the survey at the end of the fourth quarter of 2011.
During the quarter the proportion of business by borrower type was reported as 29% remortgages, 28% buy to let, 22% next time buyers, 12% first time buyers and 5% other business. On average, intermediaries deal with 12 applications a month.
In the next quarter, intermediaries are most optimistic about buy to let with 56% expecting to see an increase in this business type, 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% of intermediaries expect to see an increase in first time buyer business. Remortgages are the area they expect to be most robust with just 5% of intermediaries expecting a decline.
When asked about market conditions most intermediaries remain cautious with 40% expecting conditions to remain the same, 33% thinking they will get worse and 27% thinking things will improve.
This said, the balance of intermediaries, some 73%, feel that volumes will either be the same or higher in 2012, compared with 27% who expect a decline.
‘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,’ said John Heron, IMLA chairman.
‘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,’ he added.
Intermediary views on the economy in 2012 were also cautious. They do not expect base rates to increase in 2012. Some 70% expect no change at all. They also expect sluggish economic growth but not a recession (GDP at 0.82%) and inflation to come down but remain higher than target. On house prices they expect no real movement and their forecast for gross mortgage lending for the year ahead was £132.7 billion.
Find out more about the buy to let market in the February edition of Property Wire Confidential. Download for free.
