Borrowers demand advice

The number of mortgages being handled by intermediaries is at its highest level in over eight years - an average of 26.1 up from 25.0 in March - pointing towards the fact that brokers remain unaffected by the recent succession of rate hikes.

Independent advice on mortgages has become increasingly sought after as borrowers strive to find the best deals and lowest rates.

John Heron, managing director of Paragon Mortgages, explained: ‘‘Conditions have changed since the beginning of the summer and the credit crunch has made another rate hike less likely. Instead, product rates are increasing independent of base rates. The Bank of England has stressed how important it is that borrowers are aware of potential rises that may stretch them – in this environment, expert advice from intermediaries is more essential than ever.’

A large proportion of buy-to-let business is introduced through intermediaries as property investors are keen to seek expert advice in order to ensure they purchase the product best suited to their needs as a landlord. Therefore intermediaries are benefiting from the current stability within the sector, which has increased its market share slightly from 11.2 per cent last year to 11.9 per cent in the first half of 2007.

Heron concluded: “The countercyclical nature of buy-to-let means that as the property market slows, landlords will often expand their portfolios. Tenant demand is high and is fuelling increases in rental incomes. Consequently landlords’ appetites for continued investment are strong and the majority of these landlords will be consulting intermediaries.”