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Latest data shows rise in mortgage enquiries in UK at end of 2016

There was a significant rise in the average number of mortgage enquiries received by intermediaries in the UK in the final quarter of 2016, according to the latest data to be published.

The average number of enquiries increased by 26% to 58 per intermediary in the final quarter of last year, up from 46 in the previous quarter, the data from the Intermediary Mortgage Lender’s Association’s (IMLA) mortgage market tracker shows.

The IMLA says that this suggests that borrowers’ appetite remains strong, as buyers continue to be attracted by the low rates available on the market. It is the largest average number of enquires recorded by the tracker, surpassing the previous high of 49 recorded in the first quarter of 2016.

There was also a significant rise in the average number of buy to let enquiries, up from an average of 43 per intermediary to 63 on the previous quarter, an increase of 47%. The report explains that one of the obvious reasons for this increase is the greater complexity that landlords are now facing in the market place, providing investors with an incentive to pursue intermediated advice.

And it adds that in the final quarter of 2016 landlords will have been acutely aware of the now-implemented PRA changes to buy to let underwriting standards and the forthcoming changes to landlords’ mortgage tax relief, which are due in April.

‘It is unsurprising that there was an increase in the numbers of borrowers seeking expert advice in the final quarter of 2016, given that the changes to buy to let underwriting standards and mortgage tax relief were looming large on the horizon,’ said Peter Williams, executive director of the IMLA.

‘As the layers of regulation in the market become increasingly complicated, and the number of products increase, the intermediary market continues to play a very important role in the provision of mortgage finance to a variety of borrower types,’ he pointed out.

‘It is very encouraging to see that the profile of the intermediary channel continues to grow among borrowers, and that many more are making it their first port of call. Different borrowers have different needs, and consulting an independent expert can help ensure the best possible outcomes for a wide variety of cases,’ he added.

The latest data from the tracker also shows that greater proportions of borrowers progressed through the mortgage approval process compared to the previous quarter. In addition to an increase in the number of enquires, brokers also experienced a rise in the proportion of the number of applications in principle (AIPs) resulting in full applications, which went from 70% to 73%.

Furthermore, the proportion of full applications resulting in offers jumped from 75% to 81%, and the subsequent rate of completions Increased from 74% to 80%. The IMLA says this shows that borrowers were more willing to commit to the market in the fourth quarter, and there was an appetite among lenders for business.

The home movers market recorded the highest rate of both applications resulting in offers at 87% and offers resulting in completions, also at 87% In the buy to let market, which experienced a significant increase in demand in the fourth quarter, some 82% of applications resulted in an offer and 81% of offers resulted in a completion.

‘It is encouraging to see that customer outcomes improved in the final quarter of 2016. There was an increase in both the proportion of applications that progressed to offers, and the proportion of offers that borrowers subsequently completed upon,’ said Williams.

‘There was a lot of uncertainty following the referendum result in the third quarter, it is clear that both lenders and borrowers had faith in the market in the final quarter, and were willing to capitalise on the low mortgage rates available,’ he concluded.