Brokers predict increase in business

Paragon Mortgages’s Fact research, a panel survey of mortgage intermediaries, showed that, on average, advisers expect to do 3.6% more business in the second quarter of 2009 than they did in the first quarter of the year. This is the first predicted increase in business levels since the third quarter of 2007.

Nearly a quarter (22%) of respondents said they expect to see a 10% increase in business, with 14% predicting a rise of between 6% and 10%. Over a third of respondents (34%) expect their business levels to remain unchanged.

Overall, twice as many intermediaries expect business levels to rise in the second quarter than expect it to fall.

John Heron, Paragon Mortgages’ managing director, said: “Mortgage and housing market data continues to be mixed, but the general trend in recent weeks is of more positive signs emerging. Brokers are a key barometer of the health of the housing market and they are telling us that mortgage business levels are picking up, which should translate into more housing market activity.

"It is still very early days and we are far from a full recovery, but these are encouraging signs for a market that has been severely impacted by the credit crunch."

After a long period of consolidation in the mortgage intermediary market, brokers have also started hiring employees again. Although 75% of respondents stated that staffing levels had not changed in the first quarter, many more said staff numbers had risen (21%) than had decreased (2.5%). One in 10 respondents said staff numbers had increased by 25% or more, with 7.4% stating that staff numbers rose between 11% and 25%.

The Fact findings also show a change in the composition of respondent firms, with the number of firms employing over 10 employees declining over the past year and the number of sole traders and firms with between two and five fee earners rising. In March 2008, 6% of respondents employed over 10 fee earners, but this had declined to 3.5% by the latest survey. Meanwhile, the number of sole traders and firms employing between two and five fee earners rose from 46.3% to 47.5% and 40.3% to 42.1% respectively.

Heron adds: “Mortgage brokers play an important role in helping homebuyers find the right product and unfortunately the industry has lost many skilled people over the past 18 months. Hopefully, as businesses become more confident they will continue to hire staff and we will see these skilled professionals return to the market.

“Fact also seems to show that people that may have left larger firms have gone on to open their own businesses or have joined smaller intermediary practices.”