Advisers are reporting a 14 per cent fall in new mortgage business for the first quarter of this year, according to the Paragon Mortgages financial adviser confidence tracker index survey.
The survey reveals that new mortgage introductions fell by 14 per cent to 26.1 per adviser introductions from a record 30.2 in the final quarter of 2002.
But confidence remains steady, with introducers expecting average business to grow by 5.7 per cent in the second quarter compared with the first quarter.
Only 6 per cent of advisers expect to see a contraction in business in the second quarter, with 94 per cent projecting the same or higher levels.
The research shows an increase in remortgaging, which represents more than half of new loans for the first time at 52 per cent from 46 per cent last quarter.
First-time buyers have dwindled steadily, accounting for only 12 per cent of loans in the first quarter, down from 14 per cent in the previous quarter.
The main reason given by customers for remortgaging was to cut costs at 41 per cent, with 24 per cent citing home improvements. Consumer spending and investment in second properties represented 16 per cent and 15 per cent.
Managing director John Heron says: “Advisers are seeing a slight slowdown in volumes of mortgage business but from the very high levels seen at the end of last year. This reflects lower homebuying activity, although remortgage business remains buoyant. At the same time, they continue to be optimistic over future prospects.”