Strong demand in the mortgage market kept sustained intermediary confidence during Q3 2020, new research from the Intermediary Mortgage Lenders Association (IMLA) shows, but brokers are still treading with caution. The association’s latest Mortgage Market Tracker found that 82% of intermediaries were either ‘fairly’ or ‘very’ confident about the sector’s prospects—the same percentage as in the first two quarters of 2020 and despite the global pandemic.
The data also showed that brokers were growing in confidence about the future of the intermediary market. The survey of 300 brokers found that 94% were upbeat about the sector, compared to 88% in Q2. Mortgage intermediaries were also increasingly positive about the future of their own businesses with 95% saying they were either ‘fairly’ or ‘very’ confident.
IMLA’s latest figures correspond with unprecedented demand in the housing market as buyers continue to press ahead with their homebuying plans. The Mortgage Market Tracker found that the average number of cases intermediaries were handling each month rose again from 86 in Q2 to 90 in Q3. Of the cases brokers were handling, 65% were residential and 28% were buy-to-let, while one in ten (10%) residential applications were for product transfers.
In spite of the positive mood and ongoing demand though, the research also showed that confidence was beginning to decline in September. The percentage of brokers feeling upbeat about the wider mortgage market was 84% in August. However, amid rising COVID-19 cases, local lockdowns and the prospect of a second wave of the virus, confidence fell to 77% in September. IMLA’s research shows that advisers largely blamed stricter lending criteria, economic uncertainty and fears about a cliff edge with the end of furlough—at the time set to end on 31st October—as the key reasons behind their concerns. The figures also indicated that the average number of cases brokers handled fell in September, from 94 in August to 81.
Kate Davies, Executive Director of the Intermediary Mortgage Lenders Association, comments
“Demand is still high in the mortgage market as consumers try to take advantage of the Stamp Duty holiday, but brokers are clearly treading with caution. Intermediaries were already feeling less confident about the market in September, with a second wave of COVID-19 on the horizon and now England has moved back into a second lockdown.
“The good news is that the housing market remains open and buyers eager to move can still press ahead with their plans. This is keeping brokers and lenders incredibly busy and facing their own challenges to manage capacity, but it also means that the housing market remains a driving force in the economy.
However, next year the market still faces a significant challenge with a triple deadline on 31st March 2021, as the current Help to Buy scheme, furlough and the Stamp Duty holiday all come to an end. The prospect of this cliff-edge moment means that working together as an industry—lenders, intermediaries, conveyancers and surveyors—is all the more important as we try to manage the surge in demand with buyers rushing to complete before it’s too late.”
Notes to Editors
The IMLA Mortgage Market Tracker uses data from BVA BDRC’s Project Mercury. Findings for Q3, 2020 are based on 300 interviews with mortgage intermediaries, collected between July, August and September.
The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 43 banks, building societies and specialist lenders include 18 of the 20 largest UK mortgage lenders (measured by gross lending) and account for about 90% of mortgage lending (91.6% of balances and 92.8% of gross lending).