Data from the Intermediary Mortgage Lenders Association (IMLA) indicates the swift resurgence of adviser confidence following a minor dip post-election.
- A decline in confidence was registered in August, dropping to 33% of advisers feeling very positive from 42% in July.
- By September, confidence levels had rebounded, with 44% of advisers expressing a very positive outlook for the intermediary sector.
- While confidence in the sector improved, advisers’ confidence in their own businesses saw a slight decrease in Q3.
- The mortgage market remains resilient, with a slight overall drop in business volumes but steady rates of conversion from decision in principle to completion.
The Intermediary Mortgage Lenders Association (IMLA) has released data reflecting a brief dip but subsequent recovery in adviser confidence within the mortgage industry post-election. In July, 42% of advisers reported feeling ‘very positive’ about their sector. This figure dropped to 33% in August but rebounded to 44% in September, illustrating a rapid restoration of optimism.
In contrast to the sector-wide confidence recovery, advisers’ confidence in their individual businesses experienced a modest decline in the third quarter. Specifically, the percentage of advisers who felt ‘very confident’ about their own business dropped from 54% in the second quarter to 44% in the third. Meanwhile, those feeling ‘fairly confident’ increased from 43% to 51%. Only a slight rise in the ‘not very confident’ category was noted, moving from 2% to 3%. Despite these fluctuations, broker confidence remains high historically, maintaining levels observed before the major fiscal upheaval of Q3 2022.
Business volume metrics show a slight contraction, yet the market demonstrates resilience. The average number of mortgage cases processed by intermediaries annually decreased from 96 in the second quarter to 92. Mortgage brokers specifically handled 96 cases on average, marking a decrease of six from the previous period, while independent financial advisers (IFAs) maintained stable processing numbers at 68 cases. The distribution of business types shifted slightly, with buy-to-let cases falling from around 25% to 22% in the third quarter, residential lending comprising 68%, and specialist transactions steady at 10%.
Decision in principle (DIP) processing by intermediaries in the third quarter returned to 27, down from a second-quarter peak of 33. The conversion rate from DIP to completion stabilised at 39%, following a prior decline of six percentage points. Executive Director of IMLA, Kate Davies, remarked that ‘July’s General Election caused a very slight wobble in advisers’ confidence in their own business,’ yet noted the encouraging recovery and steady business volumes. Despite potential challenges, including a potentially adverse stance toward landlords by a Labour government, the market’s resilience has been significant.
The broader economic landscape continues to offer challenges, characterised by uncertainty that makes the environment difficult for advisers. They are required to navigate these conditions, investing significant effort to secure optimal solutions for clients. Events such as October’s Budget and the US election outcome further contribute to the uncertainty, posing questions about their potential impacts on the market and confidence levels in the upcoming quarters.
Despite fluctuations post-election, the mortgage market shows resilience, with overall confidence in the sector quickly rebounding.
