Mortgage adviser confidence has dropped to its lowest figure; however, there is still optimism when it comes to mortgage protection according to a study released by a quarterly Legal & General [L&G].

L&G’s Adviser Confidence Index for Q2 2008 indicate that the number of advisers  saying mortgage business will be better over the next few months has nearly halved from 60% to 33% since the QI report.

However, the firm says that it is not all gloom as a third of advisers are still forecasting better times next quarter.

The proportion suggesting that mortgage business will get worse has doubled from 16% to 33%.

It says that the recent steps taken by the government to inject liquidity into the market along with other measures was creating optimism to some advisers.

L&G says that protection is a priority for advisers who have hit by a loss of income from their mortgage sales.

In the protection arena, 41% of advisers expect an increase in the next three months, although 20% predict that the sales will be at their lowest next quarter while 39% thought that the sales would remain constant.

Stephen Smith, Legal&General’s director of housing says, “What a difference three months makes during a credit crunch. Our last report showed optimism in terms of overall business prospects and protection sales.”