Mortgage intermediaries recorded their busiest start to a year since the stamp duty rush, although geopolitical uncertainty weighed on confidence as the first quarter progressed, according to IMLA.
The Intermediary Mortgage Lenders Association’s latest Mortgage Market Tracker found that the average number of mortgage cases placed per intermediary rose to 96 per year in the first quarter of 2026, up from 89 in the final quarter of 2025.
IMLA said the increase was driven largely by front-loaded borrower demand following volatility linked to the Iran conflict, which began in early 2026.
The association said the conflict had caused significant swap rate volatility and pushed inflation expectations higher, leading economists to revise down forecasts for Bank Rate cuts. This prompted many mortgage borrowers to bring forward remortgage and purchase plans.
However, the Bank of England’s gross secured lending data showed a different picture, with lending falling to £68 billion in the first quarter from £78 billion in the final quarter of 2025. IMLA said this divergence reflected the lag between application activity and completed transactions, as well as wider economic caution.
Confidence improved slightly quarter-on-quarter compared with the final quarter of 2025, but fell month-on-month during the first quarter as the Iran conflict affected sentiment.
The sharpest fall was in confidence about the outlook for the wider mortgage industry. Confidence in advisers’ own businesses remained stronger, with a net score of 95. Confidence in the outlook for the intermediary sector stood at 82, while confidence in the broader mortgage industry was 79.
IMLA said all three measures remained slightly below pre-Covid norms.
Pipeline efficiency also softened compared with the final quarter of 2025. The proportion of decisions in principle resulting in a DIP accept fell to 83%, down from a three-year high of 86% in the previous quarter.
The DIP-accept-to-full-application rate remained unchanged at 73% for the fourth consecutive quarter.
Kate Davies, executive director of IMLA, said: “The striking feature of Q1 2026 is how much of the activity was driven by external shock rather than underlying market momentum. The Iran conflict and the swap rate volatility it triggered appears to have pulled a significant volume of mortgage business forward into the first quarter – business that might otherwise have been spread more evenly through the year.
“Intermediaries responded with their customary professionalism and efficiency, supporting borrowers through a period of genuine uncertainty.
“While overall conversion rates have eased from the strong Q4 2025 levels, they remain within a reasonable range, and the stability of the DIP-to-full-application rate across four consecutive quarters is a reassuring signal of underlying process quality across the sector.
“It is worth noting that lenders’ willingness to revisit affordability criteria following the FCA’s guidance changes has been a quiet but meaningful tailwind, and one that we expect to continue supporting volumes through the rest of 2026.
“Intermediaries will, as ever, be at the centre of helping borrowers navigate a complex and fast-moving market.”
