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Mini budget mayhem sees market confidence dip but ‘green shoots’ ahead – IMLA

  • 09/02/2023
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Mini budget mayhem sees market confidence dip but ‘green shoots’ ahead – IMLA
Mortgage intermediaries handled a similar volume of cases in Q4 as they did in Q3, suggesting business activity stayed steady.

The Intermediary Mortgage Lenders Association (IMLA) mortgage market tracker found that intermediaries had an average of 94 cases in Q4, similar to the previous quarter’s average of 93. This was down from a peak of 103 in 2021.  

However, confidence declined during the quarter. 

Nearly a third (29 per cent) of intermediaries reported that they were ‘not very confident’ about the outlook of the mortgage market, rising from four per cent at the same time in 2021. Notably, this lack of confidence was recorded shortly after the fallout of September’s mini Budget. 

This was also evident on a monthly basis, as IMLA’s survey showed that confidence was lowest in October just after the market turbulence but recovered in the following months. In November and December, the proportion of intermediaries who felt either ‘fairly confident’ or ‘very confident’ about the mortgage market returned to 70 per cent. 

Regarding their own businesses, intermediary confidence was a little less impacted as 11 per cent reported being ‘not very confident’ in Q4 compared to five per cent in Q3. Some 87 per cent said they were either ‘very confident’ or ‘fairly confident’ about the outlook of their businesses, just seven per cent lower than those who said the same in Q3. 


Conversion rates 

The average number of decisions in principle (DIPs) processed by intermediaries fell by two cases from Q3 to Q4, returning to levels seen in the final quarter of 2020. 

In November, the average number of DIPs came to 23 per intermediary, before rising to 26 in December. 

The conversions of DIPs to completions fell by one per cent on a quarterly basis to 37 per cent in Q4. Brokers operating in the South of England and directly authorised intermediaries saw sharper declines of six per cent and 11 per cent respectively. 

Conversions for first-time buyers and buy-to-let borrowers were stable, with nominal falls of three and two per cent respectively. 

Kate Davies, executive director of IMLA, said: “It’s not surprising that the chaotic political and economic situation which played out in the autumn has been reflected in the survey results for the last quarter of the year. But it’s also reassuring that caseloads remained steady and intermediaries’ confidence in their own business was not overly hampered.   

“There are green shoots here, with December marking a noticeable increase in confidence compared to October. Looking further back, the end of 2021 saw a record peak for the average intermediary case load and volumes of work are still remaining comparatively strong a year on, which is a positive sign.” 

She added: “The Bank of England’s continuing action to bring inflation under control, combined with strong competition amongst lenders to attract new business, are good indicators of recovery.  

“There are increasing numbers of keenly-priced products and options out there for borrowers – and it will be the job of advisers and lenders to continue helping borrowers out of the woods, supporting them in their search for an appropriate, affordable and sensible deal.” 

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