Demand in the mortgage market dipped slightly in the third quarter, data published by the Intermediary Mortgage Lenders Association (IMLA) has revealed.

The trade associations suggested this was most likely as a result of the current turbulent economic climate, as Q3 saw average intermediary case volumes decrease slightly from 97 in Q2 to 93.

Despite this, and likely in part due to rising average house prices, the Bank of England reported nearly £85bn in gross lending on all mortgages in Q3, the highest number seen since Q2 2021, when it was aided by the stamp duty holiday.

IMLA’s latest Mortgage Market Tracker has suggested that intermediary confidence in the business outlook for their own firms remained stable in Q3, with 51% stating that they were “very confident”, down slightly from 52% in Q2. There was a similar pattern for confidence in the outlook for the intermediary sector, with 91% of intermediaries confident overall, down from 93% in Q2.

However, the findings suggested that confidence among intermediaries in the outlook for the mortgage industry has fallen noticeably, with the research revealing that only 81% of intermediaries were confident overall in Q3, falling from 89% in Q2.

IMLA executive director, Kate Davies, commented: “It’s good to see that intermediaries are very confident in the business outlook of their own firms – it’s clear from our data this quarter that advisers are still very busy, with many saying that their overall workloads have increased.

“This is hardly surprising – the cumulative effects of the cost of living crisis, high inflation and higher interest and mortgage rates are creating increasingly complex circumstances for borrowers. This in turn makes the role of professional mortgage advisers more important than ever.”

Elsewhere, IMLA reported that the average number of Decisions in Principle (DIPs) that intermediaries processed remained stable in Q3, having dropped very slightly to 27, down from 28 in Q2. Despite this, levels picked up in September, at 28 per intermediary, compared favourably to the beginning of the quarter in July, at 26 per intermediary.
 
Q3 also saw conversion rates from DIP to completion fall for the fourth successive quarter to 38%, down from 44% in Q2. This figure was also 10% lower than Q3 2021.

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