It found that while Q1 2014 brought almost unanimous agreement that conditions were improving, this has since given way to a greater sense of uncertainty in the wake of MMR.
The Q3 findings showed more than half of lenders (56%) believed conditions were stable or worsening, along with 59% of brokers. The greatest doubt is among the broker community, with 45% of the total reporting worsening conditions compared with 33% of lenders.
IMLA’s research also showed an industry divided over the impact of MMR on consumers’ access to mortgages. While 63% of brokers felt significantly more people were being turned down because of affordability checks against higher interest rates, just 15% of lenders agreed. This differential reflected the experience of brokers in undertaking assessments before they submitted applications to lenders.
Lenders were more optimistic than brokers about the beneficial long-term impact of MMR on advice although the majority view among both is upbeat: 71% of lenders and 58% of brokers believe MMR will ultimately improve the quality of mortgage advice consumers receive.
Following new measures from the Bank of England’s Financial Policy Committee to curb risky lending, 55% of lenders expected further action to control the mortgage market, with 27% unsure. Expectations of further action were shared by 40% of brokers, while a further 39% are uncertain.
Of the measures announced so far, both lenders and brokers agreed the 3% income stress test will have a greater impact on the market than the 15% cap on high loan to income (LTI) mortgages.
“A landmark year for the mortgage market brought a surge of optimism and growth in the early months – albeit from a low base – followed by a cooling period as the Mortgage Market Review went fully live on 26 April,” said IMLA executive director Peter Williams (pictured). “The first use of macro-prudential controls by the Bank of England’s Financial Policy Committee (FPC) will be remembered as another historic milestone. A challenging path now lies ahead to support the market’s recovery while guarding against excess growth in household debt.”
