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Mortgage broker confidence returns to pre-mini Budget levels – IMLA

Shekina Tuahene
Written By:
Posted:
May 16, 2024
Updated:
May 16, 2024

Mortgage brokers’ confidence levels for the future of the sector rose in Q1, with 24% saying they were ‘very confident’ and 64% ‘fairly confident’, a survey found.

According to the Intermediary Mortgage Lenders Association (IMLA), this mortgage broker confidence was an improvement on the 14% and 60% who said the same about the outlook of the market in Q2. 

Collectively, this represented a rise in the share of brokers feeling ‘very confident’ or ‘fairly confident’ from 84% to 88% quarter-on-quarter. IMLA said this was the highest level of confidence since Q2 2022, just before the mini Budget. 

When it came to their own businesses, mortgage intermediaries’ confidence held strong, with 42% saying they were ‘very confident’ about the future and 53% saying they were ‘fairly confident’. 

 

Small decline in mortgage broker business 

The average number of mortgage cases placed by brokers annually dropped nominally to 92 per year, compared to 95 in Q4. IMLA said this was because of a subdued January. 

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This was also down from an average of 99 in Q1 last year. 

Residential lending continued to make up around two-thirds of intermediaries’ business, while buy-to-let (BTL) accounted for around a quarter, with a small increase recorded. 

Within the residential mortgage business, there was a small fall in the share of product transfers conducted and a slight rise in homemovers. First-time buyer and remortgage activity stayed stable. 

Among the BTL business, there was a marginal increase in limited company activity. 

The average number of decisions in principle (DIPs) completed was unchanged from the previous quarter at 23. It was also level with the same period last year. 

However, the number of DIPs processed was down on the peak of 30 seen in August last year. 

The conversions from DIP to completion rose from 38% in Q4 2023 to 42% in Q1 2024. This was also 8% higher than the same quarter last year. 

There was an increase in conversion rates for specialist brokers, with a 7% quarterly jump to 67%. For first-time buyers, DIP-to-completion conversion rates were 52%, a 7% decline on Q4. 

Kate Davies (pictured), executive director of IMLA, said: “The mortgage market has proved to be remarkably resilient through a very tough economic period, and these results suggest growing optimism. 

“Intermediaries have remained upbeat about the outlook for their own businesses for some time, but their confidence in the outlook for the wider mortgage market has improved sharply this year. This is probably a reflection of more positive sentiment resulting from rapidly falling inflation and the prospect of lower interest rates at some point in 2024.” 

She added: “There has been an uptick in activity in the specialist sector, and it will be interesting to see whether this continues, as borrowers’ financial circumstances become increasingly complex. 

“The market remains competitive, but identifying the best mortgage for their needs from the many options available is a significant challenge for borrowers, and they will continue to rely on quality mortgage advice to find the best solutions.”