There has been a rise in confidence among mortgage intermediaries for the outlook of the mortgage sector, new research by the Intermediary Mortgage Lenders Association (IMLA) has shown.

This is despite ongoing concern about the impact of rising interest rates, with four in five intermediaries (79%) reporting they were feeling confident in Q1, up from 65% at the end of last year in Q4.

Confidence in the intermediary sector is even more marked, with 87% saying they are “confident about the sector’s outlook”, a number almost on par with the level before last year’s mini-Budget.

According to IMLA’s latest Mortgage Market Tracker report, the findings have suggested that intermediaries are keeping busy, with the average adviser placing 99 cases over the previous 12 months. The figure is a small rise on Q1 2022, when there was an average of 97 cases, and only four cases off the peak of 103 in Q4 2021.

Despite recent suggestions that the buy-to-let (BTL) sector is struggling, the data has also indicated that this market held steady, with 28% of all cases handled in the BTL space, up from 26% in the previous quarter.

The average number of decisions in principle (DIPs) that intermediaries processed continued to fall in Q1, following a similar trend to the previous four quarters. On average, intermediaries dealt with 23 DIPs, which is nine less than the same quarter last year. January saw a drop to 18 DIPs per intermediary, although the figure recovered in March to rise back up to 27.

In Q1, conversions from DIP to completion also fell to 34%, representing a 10% decline year-on-year. Meanwhile, IMLA also reported that the conversion rate from full application to completion remained relatively unchanged, at 57%. February was the most positive month in Q1, with the conversion rate reaching 60%, the highest percentage since July 2022.

Conversion rates for first-time buyer focused brokers in particular increased by 3% from Q4 last year to Q1, despite the affordability challenges faced by this particular subset of borrowers.

Executive director of IMLA, Kate Davies, commented: “Given the recent uncertainty that we saw in the mortgage market in the final quarter of last year and at the start of 2023, these figures represent a positive shift. The growing confidence expressed by intermediaries is a strong signal that our sector is weathering current volatility.

“Intermediary caseloads are continuing to rise, reflecting both brokers’ growing share of the mortgage market – something that was highlighted in IMLA’s ‘New Normal’ report this year – and the importance of advice.

“As borrowers face the challenges of the rising cost of living, many are clearly turning to intermediaries as a source of guidance and support. But there is also further good news for the market in that advisers are not just helping borrowers to remortgage, but also continuing to see demand from those looking to buy too.”

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