A service that tracks different types of mortgage demand reveals that remortgaging is on the rise while borrowing for new purchases is on the way down - another sign of a slowing housing market.
Paragon Mortgages’ Financial Adviser Confidence Tracking index, based on interviews with intermediaries, reveals that remortgages for owner-occupiers made up the largest part of their business in the first quarter of this year representing 41 per cent of total applications - that’s up from 37 per cent five years ago.
Over the same period, first time buyer mortgages have increased from 16 per cent to 18 per cent of intermediary business, with the biggest step-change taking place immediately after the introduction of Help to Buy in April 2013.
However, what intermediaries call ‘next time buyer’ mortgages showed a sharp drop in the first quarter of 2018, down to just 21 per cent of intermediary business.
This compares with a relatively consistent share at between 23 per cent and 24 per cent of first quarter business in each year since 2013.
Buy to let business comprised 19 per cent of intermediary applications in Q1 2018, up slightly compared with 18 per cent recorded in the first quarter of 2017 but down from 22 per cent five years ago.
On average, intermediaries reported 22.3 mortgage introductions per office in the first quarter of 2018, up from 20.4 at the beginning of last year.
Mortgage customers continued to show a strong preference for fixed rate mortgage products, with nine out of 10 opting for interest rate certainty.
Longer term fixed rate mortgages again outshone shorter term products, with intermediaries reporting that 46 per cent of applications for fixed rate mortgages were for an intial term of five years or more compared compared to 42 per cent of applications with an intial term of two year or less.
“Given the combination of first time buyer incentives focused on new build property and mixed news on house prices more generally, it appears that an increasing proportion of potential movers are opting to stay put for the time being and lock in an attractive interest rate through remortgaging” explains John Heron, managing director of mortgages at Paragon.