How confident are intermediaries about their business prospects?

Confidence among intermediaries in the outlook for their own firms remains high, according to the Intermediary Mortgage Lenders Association (IMLA).

The latest findings from IMLA’s Mortgage Market Tracker indicate that demand in the mortgage market remains strong as intermediary workload volumes in the second quarter of the year stayed at the same level (97 cases) as in the previous quarter.

Data showed that 98% of intermediaries are confident overall in the outlook for their firm. Confidence in the outlook for the mortgage industry, while down slightly on Q1, remains high, with 89% of intermediaries feeling confident, compared to 94% in Q1. There was a similar pattern of confidence in the outlook for the intermediary sector, with overall confidence levels at 93% in Q2, down from 96% in Q1.

Meanwhile, the average number of decisions in principle (DIPs) that intermediaries processed fell slightly in Q2 to 28, from 32 in Q1. Despite this, levels picked up in June at 31 per intermediary, compared to the beginning of the quarter with 26 per intermediary.

Conversion rates from DIP to completion fell for the third successive quarter to 43%, from 44% in Q1, returning to the same level as 12 months ago. This conversion rate mirrors that achieved in the same quarter last year.

Kate Davies, executive director at IMLA, remarked that data from the second quarter of 2022 shows a strong level of activity and overall good confidence in the sector.

“Our Q2 data suggests that, despite a slight drop, advisers are continuing to respond to demand in the mortgage market by helping buyers to find new products for their housing ambitions or to remortgage,” Davies said.

“With inflation levels and interest rates reaching the highest levels in more than a decade, and the cost-of-living crisis continuing to affect millions in the UK, we expect to see more borrowers with complex financial situations seeking support from the mortgage market. Fortunately, there are now many lenders that are willing to lend to complex borrowers, and plenty of mortgage options available to these individuals.

“Advice will also be crucial for these borrowers, and advisers will play an important role in helping those with complicated and complex financial circumstances find the most suitable deal.”