Confidence in the mortgage market dropped among intermediaries during Q4 2022, although steady caseload volumes have indicated the market is returning to normal.

According to a new report from the Intermediary Mortgage Lenders Association (IMLA), the sector has recovered well from the disruption that followed the mini-Budget in September.

At the end of Q4, intermediaries estimated that the average number of mortgage cases for the previous 12 months stood at 94. This compared to an average of 93 at the of Q3 and a peak of 103 at the end of Q4 2021.

IMLA stated that the impact of the mini-Budget and resultant market volatility were evident in its data, as 29% of intermediaries reported they were “not very confident” about the outlook for the mortgage industry, rising from just 4% in the same period last year.

The most prominent dip in confidence during Q4 was in October, with November and December showing signs of stabilisation. December saw a return to a 70% proportion of intermediaries who felt either “fairly confident” (56%) or “very confident” (14%).

“It’s not surprising that the chaotic political and economic situation which played out in the autumn has been reflected in the survey results for the last quarter of the year,” IMLA executive director, Kate Davies. “But it’s also reassuring that  caseloads remained steady and intermediaries’ confidence in their own business was not overly hampered.

“There are green shoots here, with December marking a noticeable increase in confidence compared to October. Looking further back, the end of 2021 saw a record peak for the average intermediary case load and volumes of work are still remaining comparatively strong a year on, which is a positive sign.”

IMLA’s figures also showed the average number of decisions in principle that intermediaries processed in Q4 fell slightly by two when compared to Q3 2022, reaching the level from two years ago in the final quarter of 2020.

Despite a drop in November, to 23 per intermediary, December saw a rebound, rising back to 26 and matching the levels seen in July and August of 2022.

“The Bank of England’s continuing action to bring inflation under control, combined with strong competition amongst lenders to attract new business, are good indicators of recovery,” Davies added.

“There are increasing numbers of keenly priced products and options out there for borrowers – and it will be the job of advisers and lenders to continue helping borrowers out of the woods, supporting them in their search for an appropriate, affordable and sensible deal.”

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