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IFAs say property price levels are unsustainable

Over half of IFAs believe the present levels of house prices are not sustainable, according to the One Account/Money Marketing State of the IFA Nation poll.

Fifty-four per cent say current prices are unsustainable while 45 per cent believe they are sustainable. But 59 per cent of IFAs believe remortgaging and home-reversion plans will remain strong over the next 12 months while 39 per cent are negative.

The poll respondents are pessimistic that the present state of the housing market can be maintained although 59 per cent are confident that remortgaging levels will be sustained.

IFAs say remortgaging will be the biggest growth area in the mortgage market next year, with 29 per cent putting remortgaging at the top of their list.

Equity release is seen as the second-biggest growth area with 23 per cent of the 175 votes of the survey and 74 per cent say the amount of equity release they will do will increase in the next two years.

Buy to let follows in third place, taking 10 per cent, and offset mortgages with 5 per cent. Flexible and fixed-rate mortgages receive 8 and 7 per cent of the votes respectively.

IFAs put first-time buyers in seventh place with 4 per cent of votes. Self-certification sees only 2 per cent of advisers saying it will be an area of growth next year Respondents are confident that demand for all-inone mortgages, for example, CAMs and offsets, will grow with 68 per cent backing this sector.

Key Retirement Solutions managing director Colin Taylor says the recent rise in base rate to 4.25 per cent should not affect the equity-release market. More providers are entering the sec- tor, creating competition and if property prices hit a plateau, then reversion plans may still increase in popularity.

Mortgage Force mortgage consultant Stuart Brice says: “Personally, I think that remortgaging of buy to let will be more significant in the future. You have to be very careful with equity release because of its affect on inheritance. There is potential there for a backlash.”

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