Prime borrowers represented a growing proportion of the total business volumes; comprising 74 per cent of cases introduced by intermediaries to lenders, up from 73 per cent, two months ago. Self certification cases were down slightly, but sub prime was unchanged, according to IMLA. Over the next two months, brokers expect the number of prime home loans to grow slightly, and other types decline marginally. Lenders have forecasted a similar pattern, with mainstream expected to grow slightly and all types of sub-prime (particularly heavy and medium-adverse) and self certification to decline.
Peter Williams, IMLA’s executive director, said: “With home buying activity currently depressed and many fixed-rate and discounted deals up for renewal, there has been an increase in re-mortgaging business. In some cases, however, borrowers will struggle to re-mortgage and may end up paying significantly more once they switch to the lender’s standard variable rate.
He continued: “Lenders and brokers need to work together closely, not just to support new borrowers looking for a suitable mortgage, but also to help mitigate the repercussions of payment shock for existing borrowers who reach the end of their current deal.”
