Confidence in own businesses softened slightly post-election
Confidence among mortgage intermediaries remains in line with long-term averages, recovering to levels last seen in Q2 2022, the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA) has revealed.
Adviser sentiment about the mortgage industry showed some fluctuation following July’s general election but recovered by September. According to the report, the proportion of advisers feeling “very positive” about the intermediary sector dropped from 42% in July to 33% in August but rebounded to 44% in September.
However, confidence in individual businesses softened slightly. The proportion of advisers who felt “very confident” in their own businesses fell to 44% in Q3, compared with 54% in Q2, while those “fairly confident” increased from 43% to 51%.
The percentage of advisers expressing they were “not very confident” rose marginally from 2% to 3%. Despite these changes, broker confidence remains historically high, maintaining the recovery seen earlier in the year.
IMLA also reported a slight decline in business volumes. The average number of mortgage cases placed by all intermediaries fell to 92 annually, compared to 96 in Q2. Mortgage brokers processed an average of 96 cases, down from 102 in the previous quarter, while independent financial advisers (IFAs) held steady at 68.
Sector distribution showed minor shifts. Buy-to-let activity dropped slightly, accounting for 22% of business in Q3, compared to 25% in Q2. Residential lending comprised 68% of business, while specialist lending held steady at 10%.
The average number of decisions in principle (DIPs) processed by intermediaries fell to 27 in Q3, returning to long-term averages after peaking at 33 in Q2. The conversion rate from DIP to completion stabilised at 39%, following a six-percentage-point drop in the previous quarter.
“July’s general election caused a very slight wobble in advisers’ confidence in their own business, but overall, the results for Q3 2024 continue to reflect sustained positive sentiment about a mortgage market recovering well from the fiscal shock of Q3 2022,” said Kate Davies (pictured), IMLA executive director.
“Business volumes remain healthy, and the fact that there has only been a slight drop off in the proportion of buy-to-let business, despite fears about a Labour government potentially adopting an anti-landlord stance, is testament to the continued resilience of this key sector.
“The economy continues to be characterised by uncertainty, creating a difficult working environment for advisers, who are having to dig deep and put in long hours to secure the most appropriate solutions for their customers. October’s Budget and the US election result may well add to the economic uncertainty, and it will be interesting to see how these events impact our markets and adviser confidence in Q4.”
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