The latest figures from the Intermediary Mortgage Lenders Association (IMLA) show a slight softening in intermediary confidence at the end of Q3, with the timing of the Budget.
The typical intermediary placed 92 mortgage cases in the 12 months to September, marginally below Q2’s average of 94. Bank of England data shows that total secured lending recovered to £79bn in Q3, up sharply from £58bn in Q2 but broadly in line with £76bn recorded in Q1. The dip in Q2 reflected a temporary lull after many borrowers brought forward completions to beat the end of the stamp duty holiday in April. Q3’s figures therefore indicate a return to more sustainable, healthier business levels following that short-term distortion.
Confidence among brokers in the outlook for the mortgage industry edged down in Q3, with the largest dip recorded in September. While confidence in the intermediary sector also declined slightly, advisers’ confidence in their own businesses remained broadly stable.
The average number of decisions in principle (DIPs) handled by intermediaries held steady, with conversion performance consistent across the mortgage process. Overall, 36% of DIPs led to a completed mortgage, matching the figure seen in Q2. Conversion from full application to completion remained firm at 62%, producing an average of around 10 completed cases from every 17 applications.
Regional variations were apparent: brokers in the Midlands saw the strongest increases in offer-to-completion rates (+11 percentage points), while those in the South recorded the weakest performance, with conversion rates marginally down compared with the previous quarter.
Business mix remained largely unchanged, with residential mortgages continuing to represent around two-thirds of intermediary business, buy-to-let just under a fifth, and specialist lending around one in ten cases. First-time buyers remained the largest single client group.
Kate Davies, executive director of IMLA, commented: “The dip in confidence recorded in September coincided with the Chancellor’s decision to delay the Autumn Budget until 26 November, extending a period of uncertainty that has weighed on sentiment across the economy - housing included.
“Yet the intermediary market continues to perform strongly, with steady activity and sustained customer demand despite widespread caution. It’s particularly positive that the buy-to-let sector has remained resilient, despite concerns around the Renters’ Rights Bill (now the Renter’s Rights Act, having gained Royal Assent on 28 October).
“Looking ahead, there is understandable anxiety about what the forthcoming Budget might bring. Further property-related taxation or fiscal tightening could affect confidence in Q4. However, by the end of November we should at least have greater clarity, even if the news is challenging, and intermediaries will, as ever, be central to helping borrowers and landlords navigate whatever changes come next.”
