The latest Mortgage Market Tracker report from the Intermediary Mortgage Lenders Association (IMLA) reveals the average number of mortgage cases placed by intermediaries on an annual basis remained broadly stable at 92 per year, compared to 93 in Q2. Mortgage brokers placed an average of 98 cases, while IFAs reported an average of 63.

Bank of England data suggests some recovery in lending in Q3, making it the strongest lending quarter in 2023 by a short distance.

Residential lending accounted for roughly two-thirds of intermediaries’ business, buy to let around a quarter and specialist about one in 12 cases. Within residential there was a slight increase in the proportion of product transfers and a small fall in first-time buyers due to higher interest rates and the cost of living squeeze.

Despite negative headlines, the proportion of buy-to-let cases placed remained broadly consistent with Q2 2023.

Intermediary confidence in the outlook for the mortgage industry fell in July, with 51% of advisers describing themselves as ‘fairly confident’ and only 13% ‘very confident’, but sentiment improved by September, with 63% saying they were ‘fairly confident’ and 13% ‘very confident’ about the future.

Intermediary confidence in the outlook for their own businesses remained bullish, with 41% saying they were ‘very confident’ and 52% ‘fairly confident’, broadly in line with the two previous quarters.

The average number of Decisions in Principle (DIPs) that intermediaries processed increased in Q3, having stabilised in Q2 after four quarters of falls. August recorded the largest number of DIPs dealt with since June 2022, with an average of 30.

In Q3 2023, conversions from DIP to completion increased to 39%, up from 36% in Q2 and close to mid-2022 levels. The overall conversion rate was broadly similar across all market segments, and was similar among Appointed Representatives (40%) than Directly Authorised advisers (38%).

The conversion rate from full application to completion also increased to 64%, up from 59% in the preceding quarter. September was the best month on this score, with the conversion rate reaching 67%, the highest percentage since May 2022. Conversion rates for home mover-focused brokers were up significantly at 70%, an 11% increase on the previous quarter, while the figure for first-time buyer-focused brokers also increased to 66%, up from 61% in the previous quarter.

Kate Davies, executive director of IMLA, said: “These results underline the continued robustness of the mortgage market and the intermediary sector despite the ongoing challenges to the UK economy.

“Intermediaries report high levels of confidence in the outlook for their own businesses, although they are not quite as upbeat about the wider market. This standpoint is understandable given the Bank of England’s recent narrative around interest rates, which it warns will remain high until Q3 2024 at the earliest. It will be interesting to see whether sentiment improves if inflation continues to fall.

“There is a healthy degree of competition in the market, and mortgage advisers will continue to play a key role in helping borrowers identify the most suitable products from the plethora of options available.”