Confidence returns to mortgage market at end of 2023, IMLA study shows

Three in four mortgage intermediaries (74%) are now feeling confident about the outlook for mortgage market, according to new research published by the Intermediary Mortgage Lenders Association (IMLA).

The association’s latest Mortgage Market Tracker report indicated that sentiment improved steadily month-by-month in the last quarter of 2023.

In total, 76% of intermediaries said they were confident about the outlook for the market in September, falling to 69% in October but then rising to 83% by December.

The overall “confident” figure for the quarter was 74%, a significant improvement on Q4 2022, when 65% said they were confident about the future for the mortgage industry.

Confidence levels in intermediaries’ own businesses were even higher, with 92% of intermediaries describing themselves as confident in the outlook for their own firms in Q4 2023.

“It is great news that confidence is returning to the mortgage industry after a challenging year, and that intermediaries are feeling positive not just about the future of their own businesses, but the wider market in which they operate,” said IMLA executive director, Kate Davies.

“We will watch closely to see whether sentiment continues to improve if inflation carries on its downward trend.”

IMLA’s latest report was based on 301 interviews with mortgage intermediaries, and also revealed that the average number of mortgage cases placed by intermediaries on an annual basis increased to 95 per year in Q4, compared to 92 in Q3. Mortgage brokers placed an average of 103 cases, while IFAs reported an average of 62.

The association also noted that buy-to-let (BTL) lending accounted for around a quarter of all business, with proportion of BTL cases placed remaining roughly the same as the previous three quarters of 2023.

“It is interesting to note that the level of BTL business remained broadly consistent throughout 2023, despite negative headlines,” Davies added. “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.

“These latest results are 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% of all mortgage business written this year.”

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