For the third quarter of 2002, the Index stands at 131.3. This is down marginally from the spring quarter figure of 135.5 but remains higher than it was between 1995 and the beginning of this year.
The new Paragon Mortgage FACT Index shows that the prime purpose in remortgaging remains the control of outgoings. After control of outgoings, 38% of all were remortgages, home improvements accounted for 24% and 17% of remortgages were to finance a second property.
In the Buy to Let mortgage market, 39% of the mortgages arranged were for investors making a first Buy to Let acquisition and over a third, 35%, were extending their portfolios. Compared to the last quarter, there was a substantial increase in the proportion of remortgages in the Buy to Let sector, up from 16% to 19%.
Commented John Heron, Managing Director of Paragon Mortgages, “The high proportion who are remortgaging Buy to Let properties shows that investors are making use of the mortgage opportunities available to finance their investments. Remortgaging among owner-occupiers remains primarily a control and investment exercise.”
However, the proportion of remortgages to finance consumer spending – Equity Release – rose marginally in the third quarter from 13% to 15%. This is the highest figure recorded since Equity Release was first included in the survey nearly five years ago.
The FACT Index found that those going to financial advisers for mortgage advice are more likely to be remortgaging than either moving home or buying their first property. Nearly half of all mortgages handled by financial advisers (44%) were remortgages. 31% were for those moving home, 16% were first time buyers and just under one in ten was a Buy to Let investor.
The average number of mortgages arranged through financial advisers during the third quarter was down 4% compared to the second quarter. However, this remains the second highest figure over the past eight years and is 13% higher than a year ago and 26% higher than two years ago.
On average, financial advisers expect to arrange 4.1% more mortgage business during the quarter running up to Christmas.
Said John Heron, “These expectations suggest that the very strong growth experienced in the mortgage market for the past year may be tailing away a little. However, the relatively small decrease in the Confidence Index over the last quarter, coupled with reasonable expectations for the rest of the year suggests that the mortgage market will stay buoyant for the foreseeable future.”
The Paragon Mortgages FACT Index is researched quarterly. It takes as its base the mortgages in the inaugural survey, adjusts the Index by the current average and further adjusts it by the average forecast of mortgage levels for the next three months.