Mortgage adviser confidence back to pre-pandemic levels

Mortgage adviser confidence back to pre-pandemic levels
Credit: Jason Alden/Bloomberg

Advisers’ confidence in the mortgage industry has returned to levels not seen since before the start of the pandemic, according to the Intermediary Mortgage Lenders Association.

A Q1 survey of 300 mortgage intermediaries found confidence in the outlook for the mortgage industry continued to rise, with almost all intermediaries (96 per cent) confident about its future.

The figure is up from the first and last quarters of 2020, when 82 per cent and 85 per cent of intermediaries respectively reported feeling confident in their industry.

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Confidence in the outlook for the intermediary sector also continued to rise after a slight dip in Q4 2020, with the majority (97 per cent) of advisers feeling confident.

Indeed, almost all intermediaries also had a positive outlook for their own business, with 99 per cent feeling at least ‘fairly confident’ and the proportion feeling ‘very confident’ (59 per cent) back to the level seen at the end of 2019 (61 per cent).

Reasons cited by advisers included the ongoing impact of the stamp duty holiday and extension, low interest rates, the availability of 95 per cent mortgages, first-time buyers returning to the market and having ‘got through’ the pandemic.

Kate Davies, executive director at IMLA, said: “Following a difficult period in the wake of the coronavirus crisis which led to the temporary closure of the housing market, it is pleasing to see such a positive start to 2021.

“Our findings show that after a steady period of recovery, adviser activity levels and sentiment towards the outlook for the sector are now nearing levels not seen since before the start of the pandemic.

“We also expect this high demand to continue into the year, with a combination of government support helping to underpin new purchases and a bumper year for product maturities also providing significant opportunity in the refinance market.”

However, for advisers feeling less confident about the outlook for their own business, reasons included an expectation that demand will drop when the stamp duty holiday ends, and wider market conditions such as unemployment and the pandemic’s impact on the economy.

The Halifax house price index for April showed house prices were 8.2 per cent higher year-on-year, marking the highest annual growth rate in five years.

But the bank’s managing director, Russell Galley, added that the current levels of uncertainty and potential for higher unemployment as furlough support ends, led the bank to believe that house price growth would slow towards the end of the year.

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