IMLA: results of July intermediary survey

Advisers more optimistic about mortgage market than at the start of the year

Intermediaries have grown in confidence during 2012, with almost one third of firms (28%) saying they believe market conditions are now improving compared to just 14% in January.

Buy to let and first time buyer business to grow:

Research from IMLA, the trade association for UK lenders involved in the intermediary mortgage market, found more than half (56%) of advisers are predicting an increase in buy-to-let business in the next three months, with almost a third (30%) expecting to see an increase in first-time buyer business volumes too.
Back in January, just 41% said they were expecting to see an increase in buy-to-let business and just 21% said they thought they would see a pick-up in first-time buyer business during the first quarter of the year.

Over the next 3 months do you expect volumes to increase, decrease or stay the same?

  Jan-12 Jul-12
Increase No change Decrease Increase No change Decrease
Remortgages 35% 56% 10% 47% 48% 5%
First-time buyers 21% 58% 21% 30% 48% 22%
Next-time buyers 25% 58% 18% 34% 50% 15%
Buy to let 41% 48% 11% 56% 32% 12%

Source: IMLA

Non-standard conditions improve:

In terms of the type of business being conducted, there has been a slight increase in the amount of business advisers have arranged for non-standard borrowers in the last three months. While non-standard business levels are still low (49% of firms say they didn’t carry out any non-standard business in the preceding quarter) it is increasing. In January just 6% of firms said more than 10% of their business could be classed as non-standard but by July this had risen to 11%.

Looking forward, 27% of firms say they expect to introduce more standard cases in the next three months, compared to just 6% who expect to see a fall. And 23% expect to see an increase in near-prime business compared to just 9% who predict a fall.

Availability still restricted:

However, evidence of restricted availability is still an issue for intermediaries. In January 80% of firms reported not being able to help a standard borrower to secure a mortgage in the previous three months and this has hardly fallen (79%) in the last half year.

Peter Williams, IMLA Executive Director, said: “It is still not easy to help every client who walks through the door, but we are seeing more lenders looking to compete for business with more competitive products.

“The economic outlook remains challenging and the mortgage market is still limited, but the role of intermediaries is more important than ever if borrowers are to be able to find the best products available. The good news is that brokers are seeing an increase in the number of available products and more than half (51%) believe between 40% and 59% of all mortgage business will be introduced by intermediaries over the next year.”

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