Mortgage brokers in the UK grow in confidence as mortgage availability improves

Intermediaries are currently more confident about mortgage market conditions in the UK than at any point in the last 12 months but they are not quite as optimistic as lenders, a new survey shows.

Over a third of broker firms, some 37%, believe market conditions are currently improving, compared to 28% in July 2012 and 14% in January 2012, according to the latest intermediary survey from the Intermediary Mortgage Lenders Association (IMLA).

Mortgage availability is also much improved from the early part of last year. While 80% of firms were unable to secure a mortgage for one or more standard borrowers in the three months leading up to January 2012, and 79% in July, only 63% reported the same issue in January 2013.

However, brokers’ expectations for gross lending in 2013 remain more conservative than the wider industry. IMLA members, representing over 80% of lending to the intermediary market, anticipate a total of £150 billion, while intermediaries made a more cautious estimate of £139 billion. Both are below the Council of Mortgage Lenders estimate of £156 billion.

Mortgage advisers are most confident about remortgages being a source of new business, with 51% predicting volumes will grow compared with 35% in January 2012. While expectations of more buy to let business have fallen back from 56% in July, some 48% still see potential for growth in this area.

The biggest change of emphasis over the last year is in relation to first time buyers. Almost twice as many brokers, 40%, expect to see business volumes increase in this area, compared with January 2012 when it was 21%.

They believe that first time buyers will be helped by the anticipated stability of UK house prices, which intermediaries expect to be approximately £162,500 in June 2013, little more than £1,000 higher than the Land Registry figure for October 2012 which was £161,605.

‘The economic outlook remains challenging but the future is looking up for the mortgage market. The survey results show growing optimism, especially regarding opportunities for first time buyers, and intermediaries are going to play an essential role in achieving this. The likelihood of new products appearing and strong competition between lenders means high quality, professional advice will be invaluable for the many people looking to buy a property or remortgage an existing home in 2013,’ said Peter Williams, IMLA executive director.

‘It is extremely encouraging that brokers are experiencing fewer barriers to finding a suitable product for standard consumers.  Perhaps the strongest sign of renewed confidence is the fact that more than half of brokers expect the intermediary market to account for 60% or more of all mortgages sold this year,’ he explained.

He pointed out that although the Financial Services Authority (FSA) has toned down the Mortgage Market Review’s (MMR) proposed ban on execution only sales, some have already moved to end non-advised mortgage transactions and more may follow.

‘It is clear we will see the relationship between intermediaries and lenders evolving further as the market adjusts to a new regulatory environment under the Financial Conduct Authority (FCA). IMLA members place great value on the strength of their relationships with broker firms. In our work over the coming months on issues such as MMR implementation and individual registration, we will be working hard to strengthen and develop the intermediary market,’ he added.

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