Mortgage intermediaries were upbeat about the outlook of the mortgage sector in Q2, according to new research from the Intermediary Mortgage Lenders Association (IMLA).

However, the trade body’s findings also indicated “growing caution” among intermediaries for the sector looking ahead.

IMLA’s research, based on 301 interviews with mortgage intermediaries during Q2, found that 75% of advisers overall described themselves as “confident” about the mortgage market for the quarter, but the proportion of those who were “very confident” fell from 26% in April to 20% in June, while the “fairly confidents” fell from 56% to 40% over the period.

The findings still suggested that intermediaries are maintaining healthy business volumes, with the average adviser placing 93 cases over the previous 12 months. The figure is slightly lower than Q2 2022 (97 cases) and Q2 2021 (95 cases), but significantly higher than any quarter in the four years preceding 2021 – three of which pre-dated the pandemic.

The data also suggested that the buy-to-let (BTL) sector still remained buoyant in Q2, having accounted for 25% of mortgage cases placed in Q2 2023 – just a marginal reduction from the 28% recorded in Q2 2022.

IMLA executive director, Kate Davies, said: “The latest findings demonstrate the remarkable resilience of the UK mortgage market and intermediaries themselves in the face of continued market volatility.

“Confidence levels, while remaining generally robust, inevitably dipped in June as the expectation of interest rates remaining higher for longer became apparent. But with business levels maintaining healthy levels and conversion rates increasing, the outlook for the intermediary market appears positive.”

IMLA represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 54 banks, building societies and specialist lenders include 18 of the 20 largest UK mortgage lenders – measured by gross lending – and account for about 90% of mortgage lending.

The trade association’s latest figures also indicated that the average number of decisions in principle (DIPs) processed by intermediaries stabilised in Q2, having fallen for the five preceding quarters. On average, intermediaries dealt with 25 DIPs, up by two on Q1 this year, and the first quarterly increase since Q1 2022.

Conversions from DIP to completion also improved slightly at 36%, up from 34% in the previous quarter. However, IMLA noted this was significantly lower than Q2 2022, when the figure was 44%. The overall conversion rate was broadly similar across all market segments.

Davies added that the results for the last quarter were “particularly encouraging” in that they show positive activity across all market segments – including sustained levels of first-time buyer cases and growth in the home moving sector, rather than a reliance on remortgaging.

She added: “As the economic environment looks set to remain challenging, the demand for professional mortgage advice will continue to grow, and IMLA’s prediction that intermediaries could account for 90% of mortgage distribution by 2024, as reported in our New Normal report earlier this year, continues to stand.”

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