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Home arrow Market Research Findings arrow Housing/Property arrow Optimism For New Business Among Mortgage Providers Sees Significant Decline
Optimism For New Business Among Mortgage Providers Sees Significant Decline PDF Print E-mail
Written by TNS   
23 May 2005
Just over half (54 per cent) of mortgage intermediaries in Britain believe that they will be selling more mortgages in the next 12 months compared with more than over three quarters (77 per cent) a year previously, according to the findings of a survey published today by a leading global provider of market information, TNS.

The findings also reveal that intermediaries feel that the popularity offixed-rate mortgages is likely to decline over the coming three months, while the popularity of base rate tracker mortgages will increase significantly over the same period.

The TNS research shows a decline in the proportion of customers purchasing a second property as a buy-to-let investment –just 12 per cent of intermediaries said they were nowarranging this type of mortgage compared with 18 per cent six months previously, reflecting growing uncertainty about future interest rate rises and the fact that rental values have not increased in line with house prices and mortgage costs.

A downturn in the number of first-time buyers in the mortgage marketplace is also highlighted by the findings.? Over the two years between the first quarter of 2003 and the final quarter of 2004, the proportion of mortgages arranged for first-time buyers declined from more than a quarter (27 per cent) to just one in five (20 per cent) of all mortgages arranged.

However, over the same two-year period, there has been a notableincrease in the proportion of remortgages arranged by intermediaries from 36 per cent of the total mortgage market in the first quarter of 2003 to 43 per cent by the final quarter of 2004.? Of these, around six out of ten are customers who have remortgaged to release equity from their properties.

Sharon Rees, Director, TNS said: “Optimism among intermediaries for selling more mortgages during the coming 12 months is at its lowest for some years and this is unlikely to change significantly unless there is a dramatic drop in interest rates or the bottom falls out of the residential property market. In addition, regulation which was introduced in October 2004and which has placed an additional administrative burden upon intermediaries, has resulted in mortgages taking longer to process than previously.

“First-time buyers are clearly becoming less able to afford a mortgage, while existing mortgage customers who are looking to move up the property ladder are turning to more creative or niche mortgage solutions to help them support the additional debt they need to take on.

“As a result, first-time buyers are looking for mortgages based on higher income multipliers than ever before, as well as seeking to negotiate more flexible mortgages which allow them to vary repayments depending on circumstances, or to build in repayment holidays. In contrast, equity release mortgages have appeared on the market, aimed predominantly at older age group customers who see them as an alternative to investing in a pension scheme.?

“The onus is nowon mortgage providers to continue to develop mortgage packages tailored to the specific needs of customers in order to sustain the mortgage market and encourage newbuyers.”

About TNS
TNS is a market information group. We are the world’s largest custom research company and a leading provider of social and political polling. We are also a major supplier of consumer panel, TV audience measurement and media intelligence services.

TNS operates a global network spanning 70 countries and employs over 13,000 people. We
provide market information and measurement, together with insights and analysis, to local and multinational organisations.?

We combine our specialist sector knowledge with expertise in the areas of new product development, motivational research, brand and advertising research and stakeholder management to bring our clients up-to-the minute, internationally consistent information. We think differently to help our clients build competitive advantage, making TNS the sixth sense of business.

www.tns-global.com
 
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