Sentiment weakens in Q4, but intermediaries remain optimistic about their own businesses
Intermediary confidence in the mortgage market fluctuated throughout 2024, improving in the middle of the year before retreating following the Budget in October, according to the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA).
By mid-year, confidence had returned to pre-2022 levels across three key measures — market outlook, the intermediary sector, and individual business prospects. However, by the fourth quarter, sentiment had weakened.
In December, just 22% of intermediaries reported feeling “very confident” in the market, while 65% were “fairly confident,” 10% were “not very confident,” and 2% were “not at all confident.” These figures closely mirrored those recorded in Q1 2024.
Brokers remained more optimistic about their own sector than the broader mortgage market. Confidence in the intermediary space increased over the fourth quarter, with 41% of brokers describing themselves as “very confident” and 51% as “fairly confident” in December.
Outlook for individual businesses remained the strongest measure throughout the year. In Q4, 42% of brokers were “very confident” about their business, while 53% were “fairly confident.” Confidence rose as the quarter progressed, with December figures showing 56% in the “very confident” category and 41% in the “fairly confident” group.
The composition of broker business remained largely consistent. Residential lending made up around two-thirds of activity, while buy-to-let dropped slightly to 22%, and specialist lending edged up to 12%.
First-time buyers accounted for about one-third of residential transactions, while remortgages and product transfers were evenly split, each representing just under 25% of cases.
“October’s Budget dealt a blow to UK confidence across the board, including the mortgage market,” said IMLA executive director Kate Davies (pictured), who noted, however, that market sentiment showed signs of recovery after the Bank of England’s rate cut in November.
“Throughout 2024, intermediaries have consistently expressed more confidence in their own businesses than the market itself, which is testament to their faith in their ability to keep delivering in the face of adversity.”
Looking ahead, Davies suggested that falling rates could shift market dynamics.
“It will be interesting to see whether remortgaging starts to take dominance over product transfers in the year ahead, as falling rates should improve affordability and provide more opportunities for existing borrowers to shop around the whole market with the help of their broker,” she added.
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