Over four fifths (83 per cent) of intermediaries were confident about the outlook for the mortgage market in December, according to the Intermediary Mortgage Lenders Association.
The research, the Mortgage Market Tracker, found that confidence increased over the last quarter of 2023.
It reported that 76 per cent of intermediaries were confident about the outlook for the market in September, a number which fell to 69 per cent in October.
However, this dip was short lived as 83 per cent reported confidence in December, 21 per cent of which were “very confident”.
As a result, the overall “confident” figure for the quarter was 74 per cent, an improvement on the final quarter of 2022 which saw 65 per cent saying they were confident.
IMLA executive director, Kate Davies, said it was “great news” to see confidence returning to the mortgage industry after a challenging year.
“We will watch closely to see whether sentiment continues to improve if inflation carries on its downward trend,” she added.
IMLA reported that confidence levels in intermediaries’ own businesses were even higher, with 92 per cent of brokers describing themselves as confident in the outlook for their own firms in Q4 2023.
Meanwhile the average number of mortgage cases placed by intermediaries on an annual basis increased to 95 per year, compared to 92 in Q3.
Mortgage brokers placed an average of 103 cases, while IFAs reported an average of 62.
Buy-to-let
IMLA also reported that residential lending continued to account for around two-thirds of intermediaries’ business, buy-to-let around a quarter and specialist about one in 14 cases.
It was found that the proportion of buy-to-let cases placed remained roughly the same as the previous three quarters of 2023.
“It is interesting to note that the level of buy-to-let business remained broadly consistent throughout 2023, despite negative headlines,” Davies said.
“The slight drop in first-time buyer numbers was perhaps to be expected given the ongoing cost of living crisis and the increased challenge of saving for a deposit, on top of wider affordability constraints.”
It was also found that, having increased to 25 in Q2, the average number of Decisions in Principle that intermediaries processed fell in Q4, with the lowest average of just 20 DIPs recorded in December and the Christmas period.
The biggest falls were in DIPs for first-time buyer-focused brokers and specialist-placing advisers.
In Q4 2023, conversations from DIP to completion remained stable at 38 per cent, close to mid-2022 levels.
Additionally, the overall conversion rate was broadly similar across all market segments except first-time buyer focused brokers, who saw a 6 per cent fall.
Overall, Davies described the results as a “ testament to the resilience of intermediaries who have been operating in difficult conditions to secure the right solutions for their customers”.
“Competition in the market is now lively, and lenders are confident that mortgage advisers will continue to work hard to find the most suitable mortgages for their clients from a vast array of products on offer.
“As a result, IMLA predicts that intermediaries will account for 89 per cent of all mortgage business written this year.”
tom.dunstan@ft.com
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