The average number of Decisions in Principle (DIPs) that intermediaries processed increased in Q3 after stabilising in Q2 following four quarters of volume falls, according to the Q3 Mortgage Market Tracker from the Intermediary Mortgage Lenders’ Association (IMLA).
August recorded the largest number of DIPs dealt with since June 2022, with an average of 30. The number of mortgage cases placed remained stable at 92 per year compared to 93 in Q2. Mortgage brokers placed an average of 98 cases, while IFAs reported an average of 63.
Intermediary confidence in the outlook for their own businesses remained bullish, with 41 per cent saying they were ‘very confident’ and 52 per cent ‘fairly confident’, which is broadly in line with the two previous quarters.
Conversion rates, meanwhile, increased across the board.
In Q3 2023, conversions from DIP to completion increased to 39 per cent, up from 36 per cent in Q2 and close to mid-2022 levels. The overall conversion rate was broadly similar across all market segments.
Among appointed representatives this was 40 per cent while directly authorised advisers converted 38 per cent of DIPs.
The conversion rate from full application to completion also increased to 64 per cent, up from 59 per cent in the preceding quarter.
September was the best month with the conversion rate reaching 67 per cent, the highest percentage since May 2022. Conversion rates for home mover-focused brokers were up significantly at 70 per cent, an 11 per cent increase on the previous quarter. The figure for first-time buyer-focused brokers also increased to 66 per cent, up from 61 per cent in the previous quarter.
Residential lending accounted for roughly two-thirds of intermediaries’ business, buy-to-let around a quarter and specialist accounted for approximately one in 12 cases.
Within residential lending there was a slight increase in the proportion of product transfers and a small fall in first-time buyers.
The proportion of buy-to-let cases placed remained broadly consistent with Q2 2023.
Kate Davies (pictured), executive director of IMLA, said: “These results underline the continued robustness of the mortgage market and the intermediary sector despite the ongoing challenges to the UK economy.”
