Confidence among mortgage brokers held firm in the second quarter of the year despite a notable slowdown in lending activity, according to new figures from the Intermediary Mortgage Lenders Association (IMLA).

The Mortgage Market Tracker, published this week, showed intermediaries remained broadly optimistic about their businesses and the sector as a whole, even as Bank of England data confirmed a sharp fall in gross secured lending from £76bn in the first quarter to £58bn in the second.

Average annual cases placed by advisers rose from 95 to 102, underlining a resilient pipeline. Confidence in their own firms edged up in June after a brief dip in May, while sentiment about the intermediary sector was flat on the quarter but stronger than views on the wider mortgage market.

SIGNS OF STRAIN

However, the report pointed to signs of strain. The average number of decisions in principle handled per broker slipped to 30 from 33 in the previous quarter, although volumes remained above levels seen at the end of last year. The conversion rate from full application to completion fell from 68% to 61% – the lowest since late 2023 – while DIP to completion conversion also dropped by seven points to 35%, matching the level recorded in the final quarter of 2024.

Residential mortgages continued to account for two-thirds of intermediary business, with buy-to-let representing just under a quarter despite uncertainty around the Renters’ Rights Bill. Specialist lending held steady at around one in 10 cases, and first-time buyers remained the largest customer group.

Kate Davies, executive director of IMLA, said the data reflected the pull-forward of demand earlier in the year as buyers sought to complete transactions before the April end of the stamp duty holiday.

“They also reflect a market adjusting to tighter than anticipated economic conditions, given the slow pace of Bank Base Rate cuts and continued pressure on household finances.

“However, intermediaries continue to demonstrate resilience and confidence in their ability to deliver,” she said.

Davies added that activity in buy-to-let remained “reassuringly buoyant” despite landlords’ concerns over the impact of new regulation. She said: “This is an industry used to navigating uncertainty, and brokers are continuing to support customers through a complex lending environment.

“As interest rates and affordability gradually improve, and as more lenders implement looser regulation such as the increased Loan to Income flow limits, we hope to see greater momentum return to the mortgage market in the second half of the year.”