Confidence in the UK mortgage market has seen a notable rebound in the final quarter of 2023, according to the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA).
The report highlighted a significant increase in positive sentiment among mortgage intermediaries, with 83% expressing confidence in the market’s outlook by December 2023, a substantial rise from 65% in the same period the previous year.
The increase in confidence is reflected in the average number of mortgage cases handled by intermediaries, rising to 95 annually, up from 92 in the third quarter. Mortgage brokers reported an average of 103 cases, while Independent Financial Advisors (IFAs) averaged 62 cases.
The composition of intermediaries’ business remained consistent, with residential lending comprising about two-thirds, buy-to-let around a quarter, and specialist cases about 7%. The buy-to-let sector maintained its share of business throughout 2023, despite various challenges.
The report also noted a decrease in the average number of Decisions in Principle (DIPs) processed by intermediaries in the fourth quarter, particularly among those focusing on first-time buyers and specialist advisers. Nonetheless, the conversion rate from DIP to completion stayed stable at 38%, maintaining the growth seen throughout the year.
Kate Davies, IMLA’s executive director, said: “It is great news that confidence is returning to the mortgage industry after a challenging year, and that intermediaries are feeling positive not just about the future of their own businesses, but the wider market in which they operate. We will watch closely to see whether sentiment continues to improve if inflation carries on its downward trend.
“It is interesting to note that the level of buy-to-let business remained broadly consistent throughout 2023, despite negative headlines. The slight drop in first-time buyer numbers was perhaps to be expected given the ongoing cost of living crisis and the increased challenge of saving for a deposit, on top of wider affordability constraints.”
“These latest results are a testament to the resilience of intermediaries who have been operating in difficult conditions to secure the right solutions for their customers.
“Competition in the market is now lively, and lenders are confident that mortgage advisers will continue to work hard to find the most suitable mortgages for their clients from a vast array of products on offer. As a result, IMLA predicts that intermediaries will account for 89% of all mortgage business written this year.”
