This website requires JavaScript to work properly.
To enable JavaScript in your web browser please follow these simple instructions.
This Content Component encountered an error

FACT 3 16 Hero

Intermediary Sentiment Improving, but Buy-to-Let Purchases down

  • More than a third (34%) of intermediaries expect business volumes to increase
  • Buy-to-let remortgages continue to outperform buy-to-let purchases
  • 21.8 mortgages introduced per intermediary office in Q3 2016

Paragon Mortgages’ latest Financial Advisors Confidence Tracking (FACT) Index report, based on interviews with around 200 mortgage intermediaries, reveals an improvement in business sentiment, following several quarters of low confidence.

This improvement comes despite a reduction in the volume of business being written in Q3, with the latest data revealing that the number of mortgages introduced per office has fallen from 24.7 in the previous quarter, to 21.8 currently. There has also been a corresponding decrease in the average number of advisors per office, from 3.7 in Q2 to three currently.

Confidence about future business has shown some improvement however, following a summer of uncertainty created by government interventions in the buy-to-let market, and Britain’s vote to leave the EU.

Asked how much mortgage business they expect to complete over the coming quarter, more than a third of intermediaries (34%) said they expect to do more business, compared to 7% who expect to do less. On average intermediaries expect a 2.1% increase in business through the next quarter. Asked the same question in Q2 intermediaries expected an average of 0.8% more business.

Sentiment in the buy-to-let market remains mixed however following multiple government and regulatory interventions. The proportion of intermediaries describing landlord demand as ‘strong’ or ‘very strong’ has improved, increasing from 5% in Q2 2016, to 9% currently. However, 46% of intermediaries describe demand for buy-to-let mortgages as ‘weak’ or ‘very weak’, indicating that there is some way to go before sentiment recovers to levels seen prior to recent government announcements on stamp duty and landlord tax relief.

Likewise, nearly half of all buy-to-let business (44%) comprises remortgages, while just a quarter (25%) is for portfolio extension. This figure is down from 26% in the previous quarter, and from 33% in Q4 2015.

John Heron, Managing Director, Paragon Mortgages, said...

John Heron
While there has been some seasonal reduction in business volumes among intermediaries, there has also been a definite improvement in sentiment about likely future business. This comes on the back of a summer of uncertainty in the property market, and the economy more generally, following the vote to leave the EU. While any improvement in sentiment is to be welcomed, the latest data does indicate that confidence remains muted, especially in the buy-to-let market. Although intermediaries are reporting an increase in demand from landlords, a growing proportion of this demand is for remortgages and buy-to-let purchases remain at low levels. At a time of high demand for Private Rented Sector (PRS) properties, this dynamic could lead to reduced supply, higher rents, and put greater pressure on the housing market.


Paragon Mortgages is a trading style of Paragon Mortgages (2010) Limited (Registered in England No:6595834) and Paragon Bank PLC (Registered in England No:05390593). Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Paragon Bank PLC is registered on the Financial Services Register under the Firm Reference No:604551. Registered office: 51 Homer Road, Solihull, West Midlands B91 3QJ.