Intermediaries are confident about the mortgage market’s prospects after a busy second quarter of 2020, according to new data from the Intermediary Mortgage Lenders Association (IMLA).
As buyers returned to the housing market after lockdown, the Association suggested the number of advisers feeling either ‘fairly’ or ‘very’ confident in the outlook for the intermediary sector increased from 85% in Q1, to 88% in Q2.
IMLA’s latest Mortgage Market Tracker found that confidence in the wider mortgage market remained consistent with Q1, although the figure was still down when compared with 2019.
The majority of intermediaries (93%) remained positive about the outlook for their own businesses in Q2. Data revealed that this followed fluctuations in Q1 as positivity amongst intermediaries towards the market in January (95%) and February (97%) gave way to concern at the start of the COVID-19 crisis, with the proportion of intermediaries not confident about the outlook for the mortgage market rising to 47% in March.
“Despite a global pandemic and now recession, intermediaries are keeping confident and upbeat about the future of the mortgage market,” IMLA executive director, Kate Davies, commented. “In Q1, we saw a slight fall in confidence as advisers reacted to the initial impact of the COVID-19 crisis.
“However, the housing market has clearly become a driving force behind the economy after the lockdown and this has kept intermediaries positive about the future. Thousands of consumers are returning to the housing market after putting their plans on hold, while other buyers are looking to take advantage of the temporary stamp duty holiday.
“This doesn’t mean that mortgage market is free from further challenges though. Lenders already faced a backlog of applications when the housing market reopened in May and this, combined with high levels of new demand from buyers is adding to operational pressures.”
While intermediaries saw an uptick in activity in the second quarter of 2020, IMLA suggested that many had still cited the pandemic as a cause of disruption. In a sign of the impact of COVID-19 on product availability, the research revealed that just 59% of offers resulted in a completion last quarter, compared to 79% in Q1 2020, and 85% in Q4 2019.
The Association’s data also showed that the number of DiPs being processed by intermediaries fell from 24 in Q1 to just 17 in Q2 2020, along with every other stage of the application process.
Davies continued: “In some cases, applications are being delayed as lenders continue to adapt to the new normal, while supporting existing customers, in particular those who have come or are coming to the end of payment deferral periods.
“With the Government’s furlough scheme set to end in October, it remains to be seen how many jobs will have been saved and what the shape of the economic recovery will be. It’s too early to say whether the demand we are currently seeing in the mortgage market will last, but for the moment it is clearly keeping intermediaries busy and positive, as they work through a wave of applications from hopeful buyers.”
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