Mortgage intermediaries’ confidence in the outlook for the mortgage market improved in the second and third quarters of 2024, after the Budget saw this fall to the same levels as the start of the year.
The Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA) showed that by the middle of the year, confidence in the market outlook, intermediary sector and a broker’s own business returned to the pre-Truss norm.
However, by Q4, just 22% of mortgage intermediaries said they were ‘very confident’ in the outlook of the market, and 65% felt ‘fairly confident’. A tenth were ‘not very confident’ and 2% were ‘not at all confident’. IMLA said this was just a difference of 1% since its Q1 2024 survey.
Brokers seemed to have more optimism about the intermediary sector than the wider market, as confidence improved over the quarter, with 41% saying they were ‘very confident’ in the sector, while 51% said they were ‘fairly confident’.
Brokers’ confidence in their own businesses was the strongest it had been over the whole of 2024, with 42% of brokers saying they were ‘very confident’ and 53% ‘fairly confident’ about the next three months. This was a similar level of optimism seen in Q1 and there was a month-on-month improvement, with 56% of respondents saying they were ‘very confident’ in December and 41% being ‘fairly confident’.
As for the split in business, this remained fairly flat on previous quarters. Residential cases accounted for two-thirds of business, buy to let (BTL) declined slightly to 22% and specialist lending saw a small rise to 12%.
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First-time buyers accounted for a third of cases, while remortgages and product transfers accounted for under a quarter of residential cases.
Kate Davies, executive director of IMLA, said: “October’s Budget dealt a blow to UK confidence across the board, including the mortgage market. However, November’s interest rate cut and a more dovish approach from the Bank of England may have contributed to the boost in sentiment at the end of the year.
“Throughout 2024, intermediaries have consistently expressed more confidence in their own businesses than the market itself, which is testament to their faith in their ability to keep delivering in the face of adversity.
“When it comes to sub-sectors of the market, it is no surprise that buy to let has contracted slightly given the current conditions, the increase in stamp duty and the looming Renters’ Rights Bill, while a gradual rise in the proportion of specialist cases makes sense in an increasingly complex and challenging economic environment.
“It will be interesting to see whether remortgaging starts to take dominance over product transfers in the year ahead, as falling rates should improve affordability and provide more opportunities for existing borrowers to shop around the whole market with the help of their broker.”
