It showed 80 per cent of homemover applications resulted in an offer and 80 per cent of offers led to a completed deal, compared with first-time buyers and remortgagers.
The tracker – using data from BDRC Continental – examined applicants’ journey through the intermediary channel from their initial mortgage enquiry through to completion.
It found intermediaries dealt with an average of 49 new enquiries. Those intermediaries focused on the first-time buyer and homemover segments were being kept busiest with an average of 55 new equiries, followed by those doing buy-to-let business, with 52 .
Overall, 55 per cent of enquiries in the first quarter progressed to an agreement in principle, with the highest rate reported by intermediaries dealing with remortgages and specialist loans (59 per cent).
Imla suggested this is likely to be influenced by a number of factors, including: affordability constraints; some aspiring borrowers making initial enquiries without looking to progress immediately; and others shopping around and exploring their options via multiple firms or channels.
Overall, 69 per cent of agreements in principle in during the first three months of the year progressed to an application, rising to 72 per cent among firms handling homemover and remortgage cases.
Comparing types of firm, members of appointed representative firms reported a 78 per cent progress rate at both stages, compared with 73 per cent among directly authorised businesses.
According to brokers, lender decisions to decline an application in the first quarter accounted for 28 per cent of drop-outs between agreement in principle and completion stage, notwithstanding the option for those affected to keep progressing their application via another lender.
Almost three quarters of drop-outs occurred for reasons other than lender declines. Intermediaries dealing with first-time buyers reported a lower rate of lender declines (29 per cent), than those dealing with homemovers (31 per cent), or applicants for specialist loans (33 per cent).
Borrowers’ progress through the intermediary channel, Q1 2016
All | FTBs | Movers | Remo. | BTL | Specialist | |
Initial enquiries to AIPs | 55% | 51% | 55% | 59% | 56% | 59% |
AIPs to full applications | 69% | 64% | 72% | 72% | 69% | 68% |
Applications to offers | 76% | 70% | 80% | 78% | 78% | 74% |
Offers to completions | 76% | 69% | 80% | 79% | 77% | 75% |
AIPs to completions | 40% | 31% | 46% | 44% | 41% | 38% |
Applications to completions | 58% | 48% | 64% | 62% | 60% | 56% |
The research also examined business confidence among intermediary firms in the first quarter, finding that while the overwhelming majority remain confident about the future outlook, a greater level of caution exists than at any point in the previous 12 months.
Intermediary confidence – Q1 2015 to Q1 2016
| Q1 2015 | Q2 2015 | Q3 2015 | Q4 2015 | Q1 2016 |
Very confident in the mortgage industry outlook | 57 | 55 | 61 | 61 | 42 |
Fairly confident in the mortgage industry outlook | 36 | 44 | 36 | 36 | 55 |
Very confident in the intermediary sector outlook | 71 | 71 | 67 | 65 | 51 |
Fairly confident in the intermediary sector outlook | 22 | 28 | 28 | 33 | 46 |
Very confident in their own business outlook | 69 | 76 | 78 | 77 | 59 |
Fairly confident in their own business outlook | 30 | 23 | 19 | 21 | 38 |
Peter Williams, executive director of Imla, said that after a busy start to the year, this data suggests that homemovers, in particular, have taken advantage of strong competition between lenders and a fast expanding range of competitive products.
“The first time buyer market typically picks up pace in Q2, although April’s stamp duty reforms have clearly disrupted normal patterns and will have a lingering effect on the supply of property.
“Credit conditions are just one of many factors impacting first time buyers’ journey from enquiry to completion, and the EU referendum adds another unknown into the mix for Q2 which won’t go unnoticed in terms of intermediary confidence and consumer behaviour.
He added: “In the meantime, despite the rush to beat the stamp duty reforms, our analysis also suggests there was no opening of the floodgates for BTL mortgages, with the progress of BTL applications remaining broadly in line with market norms.”
Nick Green, broker at Alternative Estates & Financial Services, said the two biggest factors with first time buyers are a lack of stock and affordability, which are married together because demand is pushing prices up due to lack of supply.
“It would be interesting if there were figures to show how the customer experience going direct to providers, versus these figures, as every other week I speak to a new client who has been turned down by a high street lender for me to place it with another high street lender.
“I think that the direct business conversion rates would be a bit of an eye opener,” he added.
