With recent regulatory conditions and more resolved business conditions, the vast majority of brokers are increasing in loans.
HSBC’s latest quarterly mortgage broker barometer shows that eight of the nearly ten intermediaries (or 78%) pointed to an increase in the number of loans agreed to their clients.
The lenders’ moves came after the Financial Conduct Authority said in March that lenders were “too cautious” to grant FTB home loans under current rules.
The HSBC survey said brokers showed increased confidence in the economy as they progressed over the next six months to a year.
It found that 78% of brokers set confidence in the economy at 5 or above – a significant increase on the 10 “extremely confident” scale compared to 62% of the first broker barometer released in April.
The first investigation came as U.S. President Donald Trump’s policy on global trade tariffs began to push into the world market.
This optimism has led 87% of brokers to predict that the Bank of England’s base rate is currently 4.25%, which will be cut by the end of this year.
The money market is currently lowering at a two-minute price reduction in the second half of this year, reducing the base interest rate to 3.75%.
As a result, one in 10 brokers expect residential mortgage applications to increase over the next six months.
The report added that 12% of brokers expect a “significant” increase in the number of residential applications, while 51% expect a slight increase in hospital mortgage applications, an optimistic increase of 13% compared to previous surveys.
But while there seems to be a high level of confidence in the increase in the number of residential mortgages, confidence in landlord loans is even more confusing.
Most brokers expect that mortgage applications will remain current, reflecting the results of the first broker’s barometer, while another 20% of brokers are expected to increase.
Although, a quarter of brokers expect a slight decline in BTL apps.
Chris Pearson, head of mortgages at HSBC UK, said: “The lender’s recent adjustment to the pressure rate is clearly having a positive and tangible impact.
He added: “It is also encouraging that optimism among mortgage brokers has increased significantly, especially in the residential market and broader economic confidence.
“The strong expectation signal for lowering the Bank of England’s benchmark interest rate marks a potential reduction in pressure on borrowers and may further stimulate activity at market level and individual brokerage levels.
“Although there are many factors that determine mortgage rates, including international swap rates, the base rate remains an important economic indicator and is often one of the main drivers of economic confidence.”
The HSBC survey was interviewed by more than 1,100 mortgage brokers in July.
