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Mortgage market confidence growing

IFA confidence in the mortgage market rose sharply in the second quarter of this year, according to the latest Paragon Mortgages Financial Adviser Confidence Tracking Index.

Business levels were up by 15 per cent over the previous quarter, representing the biggest single quarter-on-quarter increase since the index was launched nearly eight years ago.

Remortgaging accounted for the biggest portion of business, totalling 42 per cent. However, the proportion of remortgages arranged for short-term gain fell to the lowest level ever, at 3.2 per cent, less than a fifth of the figure four years ago.

The prime reason for remortgaging today is to reduce or control outgoings, up to 25 per cent from 22 per cent. A quarter of remortages are to fund home improvements while 18 per cent are to finance second properties.

The index also showed that base rate tracker mortgages are continuing to grow in popularity, increasing their market share to 30 per cent from 26 per cent. This rise was mainly at the expense of fixedrate mortgages, which fell 3 per cent to 23 per cent.

Paragon managing director John Heron says: “This suggests borrowers believe the low interest rate economy is here to stay and have probably already factored in the likelihood of base rate rises of one or two per cent when they commit to a mortgage.”

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