The majority of mortgage intermediaries are positive about the outlook for their business, a survey by the Intermediary Mortgage Lenders Association (IMLA) has found.
Interviews with 200 intermediaries between May and June found the majority (93 per cent) were positive about the outlook for their own businesses.
Brokers were also more confident in the outlook for their sector than they were three months ago, with the number of advisers feeling either ‘fairly’ or ‘very’ confident at 88 per cent, up 3 per cent from Q1.
Confidence in the wider mortgage market among brokers remained consistent with Q1 at 82 per cent, although this was markedly lower than in the previous year.
Kate Davies, executive director of IMLA said: “Despite a global pandemic and now recession, intermediaries are keeping confident and upbeat about the future of the mortgage market. In Q1, we saw a slight fall in confidence as advisers reacted to the initial impact of the Covid-19 crisis.
“However, the housing market has clearly become a driving force behind the economy after the lockdown and this has kept intermediaries positive about the future. Thousands of consumers are returning to the housing market after putting their plans on hold, while other buyers are looking to take advantage of the temporary stamp duty holiday.”
The data from IMLA also found a recovery in the average number of cases handled by brokers, from 81 in March, to 87 in June.
Almost two-thirds (63 per cent) of cases in Q2 were for residential business, a quarter of which consisted of remortgage and product transfers, and a roughly equal split between movers (20 per cent) and first-time buyers (19 per cent).
Disruption persists
According to IMLA, while brokers saw an uptick in activity in Q2, many still cited the pandemic as a cause of disruption. Its data found that six in 10 offers (59 per cent) resulted in completion last quarter, compared with 79 per cent in Q1.
The average number of decisions in principle (DIPs) processed by brokers also fell, from 24 in Q1 to 17 in Q2.
Ms Davies said: “Lenders already faced a backlog of applications when the housing market reopened in May and this, combined with high levels of new demand from buyers is adding to operational pressures.
“In some cases, applications are being delayed as lenders continue to adapt to the new normal, while supporting existing customers, in particular those who have come or are coming to the end of payment deferral periods.”
But Aly Kassam, director at Easier Finances, said backlogs were clearing up. He said: “We have seen remortgage activity remain strong since the beginning of the pandemic with what feels like an explosion of purchase activity since the start of the stamp duty holiday. Lender backlogs are beginning to clear and valuations are happening in a sensible timeframe.
“We are confident in the future as we have a very big focus on customer retention - our business is built on it. Those firms and advisers who have stood by their clients, provided outstanding advice, even where there is potentially no immediate procuration fee, will come out of this pandemic with stronger client relationships and loyalty.”
Last month, the CEO of Leeds Building Society told FTAdviser that capacity was the biggest challenge for lenders amid the high levels of demand for mortgages.
Ms Davies added: “With the government’s furlough scheme set to end in October, it remains to be seen how many jobs will have been saved and what the shape of the economic recovery will be.
“It’s too early to say whether the demand we are currently seeing in the mortgage market will last, but for the moment it is clearly keeping intermediaries busy and positive, as they work through a wave of applications from hopeful buyers.”
chloe.cheung@ft.com
