Intermediary’s confidence in the mortgage industry has returned to pre-pandemic levels as businesses experience a rise in the number of cases being handled.
This is according to a new report by the Intermediary Mortgage Lenders Association (IMLA) which has quizzed brokers on their outlook during the first three months of 2021.
The trade association’s latest research recorded a 14% increase in the average annual number of cases handled by intermediaries between Q4 2020 (78) and Q1 2021 (89).
It means 96% of intermediaries are now confident about the future of the mortgage industry. A further 97% reported being confident about the intermediary sector and 99% saw a positive outlook for their own business.
It comes as the latest data from the Bank of England showed gross lending on all mortgages increased to £81.1 billion from £74.6 in Q4 2020.
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Conversion rates
In Q1 IMLA reported the business mix – the proportion of cases relating to different mortgage types – remained stable.
Two thirds (66%) of cases handled by advisers were for residential mortgages, a further 28% related to buy-to-let customers, and 6% were specialist.
However, the average number of DIPs processed by advisers increased from 25 to 28 between the final three months of 2020 and Q1 2021.
The conversion rate from DIP to completion also increased quarter-on-quarter with 43% in Q1 21 compared to 34% in Q4 20.
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After a significant drop in the wake of the coronavirus crisis, the conversion rate from offer to completion increased dramatically from 65% in Q4 2020 to 75% in Q1 2021.
The latest results show that almost two thirds of all applications resulted in a completion between January and March 2021. In Q1 2021, the rate reached 64%, compared to 68% in Q1 2020.
Kate Davies, executive director, IMLA said: “Following a difficult period in the wake of the coronavirus crisis which led to the temporary closure of the housing market, it is pleasing to see such a positive start to 2021.
“Our findings show that after a steady period of recovery, adviser activity levels and sentiment towards the outlook for the sector are now nearing levels not seen since before the start of the pandemic.
“We also expect this high demand to continue into the year, with a combination of Government support helping to underpin new purchases and a bumper year for product maturities also providing significant opportunity in the refinance market.”
Source: Mortgage Finance Gazette
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