The latest Mortgage Market Tracker report from the Intermediary Mortgage Lenders Association (IMLA) showed that confidence in the outlook for the mortgage market fell in Q4 and was below levels reported between 2015 and 2019.
Despite this, advisers felt more optimistic about their own firms than the wider mortgage market, and this sentiment improved over the quarter. In December, 57% of advisers reported feeling ‘very’ confident about the outlook for their business, and 43% felt ‘fairly’ confident.
The IMLA said this signified the resilience of broker businesses during a time of uncertainty.
Small decline in business, but better completion rates
Advisers saw a slight decline in business volumes in Q4, with the average intermediary placing 89 mortgage cases in the last 12 months compared to 92 in Q2. The IMLA said this was still notably higher than the 80 average cases completed in the 12 months to Q4 2024.
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Although there was less activity, cases were progressed more efficiently, as the share of decisions in principle (DIPs) turning into an approval rose to 86%, the highest level in the last three years. The overall conversion rate from DIP to completion rose to 40%, up four percentage points from the previous quarter. The conversion rate for full applications to completions improved from 62% to 65% quarter-on-quarter.
The IMLA said this could suggest that while advisers were handling fewer cases, more were successfully completing.
Kate Davies, executive director of the IMLA, said: “It is understandable that confidence in the wider mortgage market was somewhat subdued at the end of last year. In Q4, advisers were operating against a backdrop of economic uncertainty exacerbated by the run-up to and announcement of November’s Budget, which put a dampener on investment and growth throughout the second half of 2025.
“In fact, according to IMLA’s own figures as recorded in the New Normal Report, gross mortgage lending increased by 19% in 2025, and is forecast to grow another 11% this year.
“As we move further into 2026, with the Budget (and Budget speculation) firmly behind us, falling interest rates and greater clarity around fiscal policy should help support a firmer recovery in sentiment regarding the wider mortgage market.
“Broker confidence in their own businesses has remained extremely robust throughout, underlining the resilience of intermediary firms despite policy uncertainty and an unsettled economic environment. As the market grows this year, intermediaries will continue to play a central role in guiding around 90% of borrowers through a complex and competitive lending landscape.”
