There was a fall in the final quarter of 2020 in the average number of mortgage cases dealt with by advisers, according to new research from the Intermediary Mortgage Lenders Association (IMLA).
In Q4 the average was 78 compared to 90 between July and September.
Despite this, the vast majority of advisers remained positive about the outlook for their businesses (96%), the intermediary sector (92%), and the wider mortgage market (85%).
IMLA says its latest findings closely mirror the results of its Q3 report, reflecting positive attitudes in the sector in the second half of 2020. However, activity levels and case completion rates do remain lower than their pre-crisis levels.
While overall case volumes fell, the business mix (the proportion of cases relating different mortgage types) remained broadly similar. 66% of cases handled by advisers were for residential mortgages, a further 26% related to buy-to-let customers, and a final 8% were specialist.
The average number of DIPs processed by advisers in Q4 (25) remained consistent with the findings in Q3 2020. There were more noticeable changes in the conversion rates seen in Q4 though, particularly when compared to earlier in the year.
While the conversion rate between DIPs and DIP-accepts in Q4 (81%) remained consistent with the three previous quarters (85% in Q1, 82% in Q2 and 80% in Q3), there was a much larger fall in the conversion of offers to completions. In 2019, the conversion rate never fell below an average of 84%, on a quarterly basis. In 2020, conversions from offers to completions peaked at 79% in Q1 and fell to 65% in the final three months of the year.
Kate Davies, executive director at IMLA, said: “While there are signs that the unprecedented demand we saw in summer and autumn 2020 was already starting to cool towards the end of the year, intermediaries clearly remain positive about the outlook for the mortgage market.
“Whilst the impending Stamp Duty deadline means that activity will remain high in the weeks ahead, there are clear signs that demand will continue beyond 31st March. Advisers are also recognising that 2021 is set to be a major year for the remortgage market too, presenting plenty of opportunity. And although the rollout of the vaccine programme also gives us all more confidence that the end of the Covid-19 crisis may be in sight, many borrowers’ and prospective borrowers’ financial circumstances may have changed significantly over the past year, meaning that many of them will benefit from the expert advice which mortgage intermediaries can offer.
“However, as we approach the final months of the Stamp Duty holiday, there will be added pressure on lenders, conveyancers and all involved in the transaction process as consumers race to beat the deadline. IMLA and AMI have jointly warned that consumers need to be prepared to meet the additional costs if they cannot complete by 31 March.”
