Sector confidence holds firm as lending volumes return to long-term averages
Intermediary confidence in the mortgage sector climbed close to record levels in the first quarter of 2025, according to the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA).
The report showed 98% of brokers were confident about their own business prospects, with 46% “very confident” and 52% “fairly confident.” Confidence in the intermediary channel also remained strong, with 94% expressing a positive outlook. Although slightly lower, confidence in the wider mortgage market reached 92%, though fewer brokers (29%) described themselves as “very confident.”
The average number of cases handled by brokers rose to 95 in Q1 2025, up from 80 in the final quarter of 2024. IMLA noted that this return to long-term norms indicates that the previous dip in Q4 was likely temporary. Data from the Bank of England supported this recovery, showing secured lending volumes nearing 2022 levels.
Meanwhile, the composition of intermediary business remained relatively unchanged. Residential lending continued to make up around two-thirds of activity, while buy-to-let accounted for just under a quarter. Specialist lending comprised about 11%. Within residential cases, remortgaging and product transfers made up 27%, with first-time buyer transactions at 21%.
Brokers handled an average of 33 decisions in principle (DIPs) in Q1, up five from the previous quarter. The proportion of DIPs resulting in acceptance rose to 84%, while 74% of those converted into full applications. Offers resulting from full applications rose to 89%, the highest rate recorded in three years. Completion rates remained steady at 76%.
“These results suggest that, despite global economic and political uncertainty, the continued resilience of the UK housing market and the falling interest rate environment have combined to boost morale among mortgage intermediaries,” said Kate Davies (pictured), executive director of IMLA, said:
She added that the end of temporary Stamp Duty relief at the beginning of April may have played a role in the case volume recovery, but highlighted the stronger role of remortgaging and product transfers in driving growth.
“With affordability continuing to improve as rates come down and the regulator encouraging more lender flexibility, brokers seem confident that these higher levels of activity may continue later into the year,” Davies said.
On buy-to-let, she noted the sector’s resilience in the face of tax changes and legislative uncertainty. “The buy-to-let sector continues to thrive, still accounting for almost a quarter of mortgage business, despite the extra Stamp Duty imposed on purchases in October’s Budget and continuing concerns over the impact of the Renters’ Rights Bill.”
While acknowledging ongoing challenges such as persistent inflation, Davies said market conditions had become more favourable. “Inflation in the UK remains sticky, and the future path of interest rates is not guaranteed, but this month’s base rate cut and the recent competition and innovation among mortgage lenders are contributing to a more benign market than we have experienced for some time.”
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