Intermediary confidence in own businesses dips marginally post-election

18 November 2024

• Adviser confidence in the outlook for the mortgage market and the intermediary sector remained stable in Q3, but advisers’ confidence in their own businesses fell slightly, according to the latest findings from IMLA’s Mortgage Market Tracker

• Average number of cases placed annually by mortgage advisers reduced from 102 to 96

• Buy-to-let cases accounted for a marginally smaller fraction of business across the board, down 2%

18/11/2024 London

The latest Mortgage Market Tracker report from the Intermediary Mortgage Lenders Association (IMLA) reveals that intermediary confidence in the outlook for the mortgage industry remains at its long-run norm, having returned to Q2 2022 levels in the previous quarter. Adviser confidence in the prospects for the intermediary sector fell slightly after the election but then recovered. In July, the proportion of advisers who said they felt ‘very positive’ about their sector fell from 42% in July to 33% in August, before recovering to 44% in September.

However, brokers’ confidence in their own business reduced slightly, following a sharp upturn in Q2. The proportion of advisers saying they felt ‘very confident’ about their own business fell from 54% in Q2 to 44% in Q3, while those saying they felt ‘fairly confident’ rose from 43% to 51%. The proportion who said they were ‘not very confident’ grew from 2% to 3%.

Despite these small changes, overall levels of broker confidence are high in a historic context and show Q2’s return to their pre-Truss standing has broadly been maintained post-election.

Business volumes reduced very slightly, with the average number of mortgage cases placed by all intermediaries (mortgage brokers and IFAs combined) on an annual basis falling to 92, compared with 96 in Q2. Mortgage brokers processed an average of 96 cases, down 6 on the previous quarter, while IFA numbers were stable at 68.

Business split across the sectors altered slightly, with a small fall in the proportion of buy-to-let cases from around a quarter in Q2 to 22% in Q3 2024, with residential lending accounting for 68% and specialist business levels stable at one in 10 cases.

The average number of Decisions in Principle (DIPs) that intermediaries processed in Q3 returned towards long-run average levels at 27, down from a peak of 33 in Q2 – a level that had not been seen for two years.

Conversions from DIP to completion stabilised at 39% having fallen by six percentage points in the previous quarter.

Kate Davies, Executive Director of IMLA, comments:

“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.

“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.”