According to the recent Mortgage Market Tracker report from the Intermediary Mortgage Lenders Association (IMLA), this came as figures from the Bank of England showed gross lending fell from £76bn in Q1 to £58bn in Q2.
IMLA found that intermediaries reported having confidence in their businesses, with this slightly falling in May before recovering in June.
Long-term optimism in their own businesses was still lower than before the mini Budget, but it has been relatively stable throughout.
Confidence in the outlook for the intermediary market was flat quarter-on-quarter, with a slight dip in June. Sentiments were stronger towards the intermediary sector than the wider mortgage market.
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Number of mortgage cases rise but completions slip
IMLA found that mortgage intermediaries placed 102 cases on average, up from 95 in Q1.
Despite this, the number of decisions in principle (DIPs) fell from 33 to 30, but was still higher than levels seen at the end of last year.
Further, the average conversion from full application to completion decreased to 61%, which was the lowest conversion rate since the end of 2023. The conversion from DIP to completion all fell by seven percentage points to 35%, matching levels seen in the last three months of 2024.
Residential mortgage cases made up two-thirds of business for intermediaries, and buy to let (BTL) accounted for just under a quarter. Specialist lending made up around a tenth of cases.
In Q2, first-time buyers were the largest customer group.
Kate Davies, executive director of IMLA, said: “As expected, Q2’s figures reflect the front-loading of mortgage business in Q1 this year caused by the end of the stamp duty holiday in April. They also reflect a market adjusting to tighter-than-anticipated economic conditions, given the slow pace of bank base rate cuts and continued pressure on household finances. However, intermediaries continue to demonstrate resilience and confidence in their ability to deliver.
“Activity in the buy-to-let sector remains reassuringly buoyant, particularly in light of the concerns many have expressed over the imminent legislative changes the Renters’ Rights Bill will impose on landlords.”
She added: “This is an industry used to navigating uncertainty, and brokers are continuing to support customers through a complex lending environment.
“As interest rates and affordability gradually improve, and as more lenders implement looser regulation such as the increased loan-to-income flow limits, we hope to see greater momentum return to the mortgage market in the second half of the year.”
