Mortgage market confidence dropped in Q4, but steady caseload volumes show business as usual on the horizon

09 February 2023

  • Average intermediary caseload volumes remained steady in Q4 compared to the previous quarter, according to the latest findings from IMLA’s Mortgage Market Tracker.
  • Only 56% of intermediaries were ‘confident’ in the market in October following the mini-budget but this returned quickly to 70% ‘confident’ in December 2022

The latest Mortgage Market Tracker report from the Intermediary Mortgage Lenders Association (IMLA) has been released today, finding that the sector has recovered well from the disruption following the mini-budget in September 2022.

Overall, the average number of mortgage cases intermediaries estimated for the year held steady, at 94 compared to a peak of 103 at the end of last year and an average of 93 last quarter.

The effects of the mini-budget and resultant market volatility were evident in the data, with 29% of intermediaries reporting in Q4 2022 that they were ‘not very confident’ about the outlook for the mortgage industry, rising from just 4% during the same time period last year. However, the most prominent dip in confidence for Q4 was during October, with November and December showing signs of stabilisation—returning to a 70% proportion of intermediaries who felt either ‘fairly confident’ (56%) or ‘very confident’ (14%) in December.

Comparatively, intermediary confidence in their own business declined only slightly. In Q4, 11% of intermediaries reported being ‘not very confident’ in the outlook for their business, rising from the 5% reporting the same in the previous quarter. However, overall, 87% of intermediaries still reported that they were either ‘very confident’ or ‘fairly confident’ in their own business outlook during the final quarter of 2022, a dip of only 7% from Q3 despite the October disruption and rising interest rates.

Coversion rates

The average number of Decisions in Principle (DIPs) that intermediaries processed in Q4 fell slightly by 2 when compared to Q3 2022, reaching the level seen two years ago in the final quarter of 2020. Despite a drop in November (to 23 per intermediary), December saw a rebound, rising back up to 26 and matching the levels seen in July and August of 2022.

In Q4, the conversions of DIPs to completions also fell very slightly by 1% from Q3 2022, down to 37%. The business area and region seeing the biggest drop in conversions were in directly authorised DIPs and brokers operating out of the South of England, seeing falls of 11% and 6% respectively during Q4. Conversions for First-Time Buyers and Buy to Lets also remained steady with slight falls of 3% and 2%, reflecting a strong mortgage pipeline in the face of the macro-economic challenges now facing FTBs and some BTL landlords.1

Kate Davies, Executive Director, IMLA commented:

“It’s not surprising that the chaotic political and economic situation which played out in the autumn has been reflected in the survey results for the last quarter of the year. But it’s also reassuring that caseloads remained steady and intermediaries’ confidence in their own business was not overly hampered.

“There are green shoots here, with December marking a noticeable increase in confidence compared to October. Looking further back, the end of 2021 saw a record peak for the average intermediary case load and volumes of work are still remaining comparatively strong a year on, which is a positive sign.

“The Bank of England’s continuing action to bring inflation under control, combined with strong competition amongst lenders to attract new business, are good indicators of recovery. There are increasing numbers of keenly-priced products and options out there for borrowers—and it will be the job of advisers and lenders to continue helping borrowers out of the woods, supporting them in their search for an appropriate, affordable and sensible deal.”

1 FTB and BTL focused brokers, defined as:

  • At least 4 out of every 10 residential mortgages placed—FTB
  • At least 2 out of 10 mortgaged placed—BTL

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For further information please contact:

Tom Stewart-Walvin, Rostrum
Tel: +44 (0)7855 689 302

Notes to Editors

The IMLA Mortgage Market Tracker uses data from BVA BDRC’s Project Mercury. Findings for Q4, 2022 are based on around 300 interviews with mortgage intermediaries, collected across October, November, December.

About IMLA 

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 53 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). 

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