Outlook for the intermediary sector was largely unchanged from the previous quarter, with a slight decline in June, yet remained more positive than for the wider mortgage market.
The average annual number of cases handled by intermediaries increased to 102, up from 95 in the previous quarter.
Despite the steady confidence, which was also reflected in Nottingham Building Society’s recent broker survey, some business flow indicators showed signs of pressure. The average number of decisions in principle (DIPs) processed fell to 30, down from 33 in Q1, but remained above figures recorded at the end of last year. The conversion rate from full application to completion dropped to 61%, the lowest since late 2023. Similarly, the conversion from DIP to completion declined by seven percentage points to 35%, matching the level seen in the final quarter of 2024.
Regarding business composition, residential mortgages continued to account for around two-thirds of intermediary activity, while buy-to-let made up just under a quarter, despite ongoing concerns about the Renters’ Rights Bill. Specialist lending comprised roughly one in 10 cases, while first-time buyers remained the largest group of clients.
“As expected, Q2’s figures reflect the front loading of mortgage business in Q1 this year caused by the end of the Stamp Duty holiday in April,” said Kate Davies (pictured), executive director at IMLA. “They also reflect a market adjusting to tighter than anticipated economic conditions, given the slow pace of bank base rate cuts and continued pressure on household finances.