Intermediary confidence dipped slightly in the third quarter as brokers entered the final weeks before the delayed Autumn Budget, although completion levels across the market remained consistent, according to the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association.
The average intermediary placed 92 mortgage cases in the year to September, a marginal decline from 94 in the previous quarter. Bank of England figures suggest overall secured lending has normalised following the distortion created by the end of the stamp duty holiday in April, recovering to £79 billion in Q3 after a subdued second quarter.
While confidence in the wider mortgage industry eased during the quarter, advisers remained most assured about the prospects of their own firms. Sentiment weakened most noticeably in September, coinciding with the Chancellor’s decision to postpone the Budget to 26 November, a move that extended uncertainty across the housing market.
Decision in Principle volumes were broadly unchanged and conversion performance across the mortgage process held firm. 36% of DIPs moved through to completion, in line with Q2, while applications converted at a steady rate of 62%. On average, intermediaries secured around 10 completed cases from every 17 applications.
Regional differences were marked. Brokers in the Midlands reported the strongest improvement in offer-to-completion conversion, up by 11 percentage points. Those in the South saw a slight decline on the previous quarter.
The composition of business also showed little variation. Residential lending continued to account for around two-thirds of intermediary activity, with buy-to-let just under a fifth and specialist lending close to one in 10 cases. First-time buyers remained the largest customer group.
Kate Davies, executive director of IMLA, said:“The dip in confidence recorded in September coincided with the Chancellor’s decision to delay the Autumn Budget until 26 November, extending a period of uncertainty that has weighed on sentiment across the economy – housing included.
“Yet the intermediary market continues to perform strongly, with steady activity and sustained customer demand despite widespread caution.
“It’s particularly positive that the buy-to-let sector has remained resilient, despite concerns around the Renters’ Rights Bill (now the Renter’s Rights Act, having gained Royal Assent on 28 October).”
She added that anxiety about potential property-related taxation or fiscal tightening is likely to persist into the final quarter. “Looking ahead, there is understandable anxiety about what the forthcoming Budget might bring. Further property-related taxation or fiscal tightening could affect confidence in Q4.
“However, by the end of November we should at least have greater clarity, even if the news is challenging, and intermediaries will, as ever, be central to helping borrowers and landlords navigate whatever changes come next.”
