Confidence among mortgage intermediaries increased in the first quarter, new research by the Intermediary Mortgage Lenders Association (IMLA) has indicated.

IMLA’s latest Mortgage Market Tracker report showed that 24% of advisers described themselves as “very confident” and 62% as “fairly confident” about the future in Q1, compared with 14% and 60% in the previous quarter, respectively.

Such levels of intermediary confidence have not been recorded since Q2 2022, preceding the fiscal event in the autumn of that year carried out by Liz Truss’ Government.

The average number of mortgage cases placed by intermediaries on an annual basis was slightly down at 92 per year, however, compared to 95 in Q4 2023, although said this was mainly due to a subdued January.

Mortgage brokers placed an average of 96 cases, while IFAs reported an average of 69.

IMLA executive director, Kate Davies, commented: “The mortgage market has proved to be remarkably resilient through a very tough economic period, and these results suggest growing optimism.

“Intermediaries have remained upbeat about the outlook for their own businesses for some time, but their confidence in the outlook for the wider mortgage market has improved sharply this year. This is probably a reflection of more positive sentiment resulting from rapidly falling inflation and the prospect of lower interest rates at some point in 2024.”

Residential lending continued to account for around two thirds of intermediaries’ business, with buy-to-let (BTL) making up around a quarter, and a slight increase in specialist activity to roughly one in 11 cases.

Within the residential lending sector, there was a slight decrease in the proportion of product transfers and a small rise in movers, with first-time buyer and remortgage activity remaining stable. The BTL sector saw a marginal increase in limited company activity.

IMLA also revealed that the conversion rate from a full mortgage application to completion also increased to 63%, up from 61% in the preceding quarter. Conversion rates for specialist-focused brokers were up significantly at 67%, a 7% increase on the previous quarter.

“There has been an uptick in activity in the specialist sector, and it will be interesting to see whether this continues, as borrowers’ financial circumstances become increasingly complex,” added Davies.

“The market remains competitive, but identifying the best mortgage for their needs from the many options available is a significant challenge for borrowers, and they will continue to rely on quality mortgage advice to find the best solutions.”

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