Confidence about the mortgage market’s prospects has significantly increased in the last six months according to the latest results from NatWest Intermediary Solutions’ Mortgage Intermediary Market Confidence Barometer.
Measuring confidence across six market components the index score jumped 10.2 points from 56.3 in July to 66.5 in December.
The survey, conducted in December amongst 501 intermediaries, measured the degree of confidence they had for six key market components. Brokers were asked to rate each component out of 100, with a score of over 50 indicating a positive view whereas a score of under 50 indicates a negative outlook.
Confidence has improved significantly across all six components. The biggest increase in optimism was for the Potential for house prices to rise with an index score increasing by 15.1 points to 72.8 (up from 57.7) which was also the highest index score of the six components. Brokers were also very optimistic about the Demand for remortgaging which scored 72.1 (up from 64.8) on the index.
There are now few concerns about the availability of funding with Sufficient funding from lenders across all LTVs getting an index score of 68.7 (up from 56.5). Brokers are dramatically more optimistic about the prospects for Homeowners having sufficient equity in their existing properties to move a 12.6 point rise to 64.5 (up from 51.9).
First-time buyer affordability is no longer the component with the lowest level of confidence. Its index score jumped to 62.1 (up from 51.9). Although its index score improved, it seems that there are still some concerns about an Adequate supply of properties in your local area which had the smallest improvement in optimism and the lowest overall level of confidence (albeit it still comfortably in positive territory) with an index score of 58.8 (up from 54.8).
Graham Felstead, head of NatWest Intermediary Solutions, said: “The greater amount of stability experienced in the second half of 2013 has undoubtedly led to a feeling of more confidence for 2014. With economic conditions improving and the continuation of the Government’s Help to Buy and NewBuy schemes lending support to the mortgage market, I think this is the first year for a long time that, collectively, the industry has had such a strong belief that it will be an improvement on the previous one.
“From our point of view, 2013 was a great year thanks to the support we received from intermediaries. We increased our lending significantly and will be looking to do likewise in 2014. Over the last 12 months, we have improved much of our criteria and product features and we will be developing even more improvements to our service and processing throughout the year. We have recruited more broker-facing staff and are still on the look out for more. 2014 promises to be an even better year than 2013 and these latest results seem to indicate strongly that this feeling is shared by the majority of brokers.”
