Intermediary confidence neared "historic levels" in the first quarter, the Intermediary Mortgage Lenders Association (IMLA) has revealed.

The association’s latest Mortgage Market Tracker report showed that 98% of intermediaries said they were confident about the prospects of their own businesses in Q1.

This result comprised of 46% of intermediaries who felt very confident about their business prospects, alongside 52% who felt fairly confident.

When looking at the outlook of the intermediary sector, 44% of intermediaries said they were very confident, while 49% stated that they were fairly confident.

Furthermore, 92% of intermediaries said they were confident about the mortgage market in general, although only 29% said they were very confident.

IMLA also recorded a sharp recovery in average business levels in Q1, increasing from 80 cases per year in the previous quarter to 95 cases. The association said that this suggests that the reported fall in Q4 2024 was a "blip", rather than a real shift.

Executive director at IMLA, Kate Davies, said that despite global economic and political uncertainty, the results suggest that the "continued resilience" of the UK housing market and the falling interest rate environment have "combined to boost morale among mortgage intermediaries".

She added: "The end of the Stamp Duty concessions on 1 April will have contributed somewhat to the uplift in average case numbers. However, the fact that first-time buyer businesses accounted for a smaller proportion of residential activity than remortgages and PTs demonstrates a more general recovery of business levels.

"With affordability continuing to improve as rates come down and the regulator encouraging more lender flexibility, brokers seem confident that these higher levels of activity may continue later into the year."

IMLA found that in terms of case volumes across Q1, there was little change in business mix, with residential lending making up two thirds of intermediaries’ business.

Buy-to-let case volumes made up just under a quarter of volume in this period, while specialist lending accounted for around one case in nine.

Furthermore, the average number of decisions in principle (DIPs) dealt with by intermediaries increased by 5 points in the quarter to 33.

Davies concluded: "The buy-to-let sector continues to thrive, still accounting for almost a quarter of mortgage business, despite the extra Stamp Duty imposed on purchases in October’s Budget and continuing concerns over the impact of the Renters’ Rights Bill.

"The fact that the proportion of cases successfully progressing from every stage from DIP to completion increased in Q1 is also good news.

"Inflation in the UK remains sticky, and the future path of interest rates is not guaranteed, but this month’s base rate cut and the recent competition and innovation among mortgage lenders are contributing to a more benign market than we have experienced for some time. It will be interesting to see whether the Mortgage Market Tracker results for Q2 remain as positive as the first three months of 2025 – let’s hope so."

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