• Remortgages grow to 41% of intermediary business
• First time buyer mortgages reach 18% of applications
• Home mover mortgage applications fall from 24% to 21%

Remortgage activity is continuing to grow as a proportion of overall mortgage business, according to Paragon’s latest Financial Adviser Confidence Tracking (FACT) Index, based on interviews with 201 mortgage intermediaries.

Intermediaries reported that remortgages for owner-occupiers made up the largest part of their business in Q1 2018, representing 41% of total applications, up from 37% of business five years ago.

Over the same period, first time buyer mortgages have increased from 16% to 18% of intermediary business, with the biggest step-change taking place immediately after the introduction of Help to Buy in April 2013.

However, next time buyer mortgages showed a sharp drop in the first quarter of 2018, down to just 21% of intermediary business. This compares with a relatively consistent share at between 23% and 24% of first quarter business in each year since 2013.

Buy-to-let business comprised 19% of intermediary applications in Q1 2018, up slightly compared with 18% recorded in the first quarter of 2017 but down from 22% five years ago.

On average, intermediaries reported 22.3 mortgage introductions per office in the first quarter of 2018, up from 20.4 at the beginning of last year.

Mortgage customers continued to show a strong preference for fixed rate mortgage products, with an overwhelming nine out of ten (91%) opting for interest rate certainty.

Longer term fixed rate mortgages again outshone shorter term products, with intermediaries reporting that 46% of applications for fixed rate mortgages were for an intial term of five years or more compared compared to 42% of applications with an intial term of two year or less.

John Heron, Managing Director of Mortgages at Paragon said:

Potential home movers are weighing their options carefully at the moment. Given the combination of first time buyer incentives focused on new build property and mixed news on house prices more generally, it appears that an increasing proportion of potential movers are opting to stay put for the time being and lock in an attractive interest rate through remortgaging.