Brokers remained “confident” about their business prospects and the wider intermediary sector during the second quarter despite weaker lending in the period, according to the Intermediary Mortgage Lenders Association.
The Bank of England figures posted a steep fall in overall gross secured lending to £58bn in the second quarter from £76bn in the previous three months.
This came after stamp duty thresholds on 1 April were lowered back to September 2022 levels, before the Liz Truss mini-Budget.
However, the average number of cases placed by mortgage brokers annually increased to 102, up from 95 the previous quarter, Imla said.
The body added: “Broker confidence in their own businesses edged up in the second quarter, with a slight fall in May recovering in June.
“While long-term confidence remains below pre-2022 Liz Truss levels, sentiment has stabilised following recent volatility. Confidence in the outlook for the intermediary sector was broadly flat compared with the first quarter, dipping in June but remaining stronger than for the wider mortgage market.”
But the association added that, while “confidence held firm” among advisers, “business flow indicators showed some slight signs of strain”.
The number of decision-in-principles dealt with fell to 30 from 33 in the first quarter, but was still up compared to the levels at the end of last year.
The average conversion from full application to completion fell to 61% – the lowest since the end of 2023.
Conversion from decision-in-principle to completion also declined by seven percentage points to 35%, matching the level seen in the final three months of 2024.
Residential mortgages continue to make up two-thirds of a broker’s business, with buy-to-let accounting for just under a quarter, despite concerns around the impact of the Renters’ Rights Bill.
Specialist lending represented around one in ten cases. First-time buyers remained the largest customer segment.
Imla executive director Kate Davies said:
“As expected, the second quarter’s figures reflect the front-loading of mortgage business in the first quarter caused by the end of the Stamp Duty holiday in April.
“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. However, intermediaries continue to demonstrate resilience and confidence in their ability to deliver.
“This is an industry used to navigating uncertainty, and brokers are continuing to support customers through a complex lending environment.
“As interest rates and affordability gradually improve, and as more lenders implement looser regulation such as the increased loan-to-income flow limits, we hope to see greater momentum return to the mortgage market in the second half of the year.”
