Adviser confidence rises as business volumes continue to grow
Intermediary confidence in the UK mortgage market has returned to its long-term average, according to the Intermediary Mortgage Lenders Association (IMLA).
IMLA’s latest Mortgage Market Tracker report shows that business volumes continue to grow, with mortgage brokers processing an average of 102 cases in the year to June 2024, a figure last seen in 2021.
In the second quarter of 2024, 29% of advisers described themselves as “very confident” about the future, while 65% said they were “fairly confident.” This is an increase from the first quarter, where 24% were “very confident” and 62% “fairly confident.”
Confidence in the intermediary sector itself also rose, with 94% of advisers expressing either “very” or “fairly” confident views, up from 88% in the previous quarter.
Meanwhile, confidence in the outlook for advisers’ own businesses saw an even sharper improvement, with 54% saying they were "very confident" and 43% “fairly confident.” The share of advisers who were “not very” or “not at all” confident remained minimal, a continuation of the decline first observed in Q1 2024. Such levels of confidence mark a full recovery from the low point following the Truss government’s mini budget in September 2022.
The average number of mortgage cases placed by intermediaries annually increased to 96, up from 92 in Q1 2024. While the market remains subdued, Bank of England figures indicate some recovery in Q2. Mortgage brokers placed an average of 102 cases, while independent financial advisers (IFAs) averaged 67.
IMLA also reported that the distribution of business across sectors remained largely unchanged from Q1 2024, with residential lending accounting for about two-thirds of intermediary business, buy-to-let loans around a quarter, and specialist cases comprising about one in 10. Q2 saw a slight decline in product transfers and a small rise in “other” specialist cases.
The number of Decisions in Principle (DIPs) processed by intermediaries grew significantly in Q2, reaching 33, a level not seen for two years and surpassing the August 2023 peak of 30. The increase in DIPs was broad-based, with first-time buyer DIPs rising by 11, remortgages by 10, buy-to-let by nine, and “other specialist” DIPs by six. Only the home mover segment saw a slight decrease of three DIPs.
“These results reflect not just increased activity in the mortgage market but greater positivity about the future than we have seen for some time,” said Kate Davies (pictured), executive director of IMLA. “It is encouraging to see that business volumes have been sustained across all sectors. Despite predictions of a mass exodus of landlords from the buy-to-let market, and concern that affordability challenges would deter all but a few of the wealthiest first-time buyers, there has been no discernible reduction in overall cases in either sector.
“Intermediaries have been working harder than ever to find the most suitable solutions for their customers across the sectors, which has no doubt played an important part in maintaining these numbers.
“These results reflect the period before the change of government and before the Bank of England made its first interest rate cut since March 2020. We will be watching with interest to see whether the next Mortgage Market Tracker reveals an even more positive outlook for our industry.”
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