Following the recent General Election, the confidence among mortgage intermediaries has shown a slight drop, as revealed by IMLA’s latest report.
- Adviser confidence in the intermediary sector took a dip post-election but showed signs of recovery by September.
- The number of advisers feeling ‘very positive’ about their sector dropped notably between July and August.
- Confidence in individual businesses saw a decline, with a decrease in those feeling ‘very confident’.
- Despite slight setbacks, intermediary confidence has largely maintained historical levels.
The latest report from the Intermediary Mortgage Lenders Association (IMLA) highlights a minor decline in intermediary confidence following the General Election. Despite this decrease, the overall confidence in the mortgage industry remained aligned with long-standing norms during the third quarter.
In July, the percentage of advisers who felt ‘very positive’ about their sector fell sharply from 42% to 33%, a significant drop captured by the IMLA’s findings. However, this figure rebounded to 44% by September, showcasing resilience within the industry.
Adviser confidence in their own businesses experienced a dip in the third quarter. The proportion of those feeling ‘very confident’ fell from 54% in the previous quarter to 44%, whereas those feeling ‘fairly confident’ rose slightly from 43% to 51%. Meanwhile, the percentage of advisers who felt ‘not very confident’ edged up from 2% to 3%.
This fluctuation in confidence levels, while slight, indicates a stable and historically high level of confidence when viewed in a broader context. The path back to pre-Truss confidence levels achieved in the second quarter has largely been sustained post-election.
Mortgage business volumes saw a marginal decrease, with the average annual number of cases managed by intermediaries dropping to 92 from 96 in the previous quarter. Mortgage brokers processed an average of 96 cases—down from the preceding quarter—while Independent Financial Advisers (IFAs) remained stable at an average of 68 cases each.
The composition of business across sectors witnessed minor changes as well. Buy-to-let cases represented a smaller share, decreasing from around a quarter to 22% by the third quarter, while residential lending held steady at 68%, and specialist business maintained a consistent 10%.
The average number of Decisions in Principle (DIPs) processed by intermediaries returned to their long-term average of 27 in Q3, down from 33 in the previous quarter, marking a level not seen in two years. The rate of conversion from DIP to completion stabilized at 39%, after experiencing a six-percentage-point drop the previous quarter.
Kate Davies, IMLA’s executive director, explained, “July’s General Election caused a very slight wobble in advisers’ confidence in their own business, but overall the results for Q3 2024 continue to reflect sustained positive sentiment about a mortgage market recovering well from the fiscal shock of Q3 2022.” She noted the resilience of the buy-to-let sector despite earlier concerns over government policy.
Nevertheless, she cautioned that ongoing economic uncertainty, compounded by events like October’s Budget and the US Election, presents challenges for advisers who must continue to work diligently to find the best solutions for their clients.
The intermediary sector’s confidence remained robust despite minor post-election fluctuations, reflecting enduring positivity within the mortgage market.
