Intermediaries’ expectations for future business improve slightly, but confidence remains fragile
Intermediaries’ forecasts of future business volumes are slightly more positive than in May or July this year, but their overall level of confidence continues to be fragile, according to latest research collected by the Intermediary Mortgages Lenders Association. 486 brokers responded to IMLA’s survey conducted during September.
Asked about their forecasts for future levels of mortgage business, intermediaries expected a decline of between 0.4% (for remortgages) and 2.3% (first time buyers) over the following two months. However, this reflects a slightly more positive outlook than in May 2008, when first time buyer business was expected to fall by almost 5%, home mover activity by 3.6% and buy-to-let by 3.4%.
A year ago, in October 2007, expectations for remortgage and other business were in positive territory, although brokers were already predicting that first time buyer, home mover and buy-to-let business would decline over the following period.
IMLA’s index of intermediary confidence, based on the number of mortgages currently being introduced and their expectations regarding future volumes, has shown a gradual decline since it was first computed in March this year. However, after significant falls between March and May, and between May and July, the rate of decline in confidence has eased slightly.
Peter Williams, IMLA’s executive director, says: “These survey results, obtained from intermediaries before the latest volatility in international markets, appear to offer a glimmer of hope that confidence among brokers is starting to return, very slowly. The sharp falls in expected business volumes and in confidence do seem to have been arrested – although last week’s events suggest that we are far from out of the woods and the recent Bank of England Credit conditions survey points to lender expectations of tighter lending in the fourth quarter.”
“Belatedly, the tripartite authorities have been jolted by external events into taking firm action to provide additional liquidity, offer public sector support to the markets and to much of the financial services industry, and take seriously the threat of global recession. While the seriousness of the situation remains worrying, we do welcome the government’s involvement although we would like to see support extended to all lenders including the non-bank sector. We await Sir James Crosby’s report with baited breath.”
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For further information please contact:
Brian Thorn / Sarah Davidson, Wriglesworth Tel: 020 7427 1400
NOTES TO EDITORS
IMLA is the specialist trade body representing the interests of lenders who market their products primarily through brokers, rather than direct or through a branch network. The sub prime market makes up around 8% of the UK mortgage market and had a value in excess of £20 billion in 2005. Alongside that market is the self-certification market making up a further 10% and with a value in 2005 of around £30 billion. Both sub-prime and self-certification loans are almost exclusively sold via brokers rather than direct through lenders’ branches. Currently over 60% of mortgages are sold through intermediaries and this market continues to grow.
IMLA provides a unique opportunity for senior industry professionals to meet on a regular basis to discuss key current initiatives and contribute actively through IMLA and other fora such as the Council of Mortgage Lenders.
IMLA was formed in 1988 as the Association of Mortgage Lenders and was instrumental in the creation of the CML. It changed its name to IMLA in 1995. Subsequently IMLA helped bring the Association of Mortgage Intermediaries (AMI) into being and was instrumental in bringing the mortgage advisers qualification CeMAP to fruition.
More information can be viewed at the IMLA website www.imla.org.uk.
IMLA Management Committee 2008
Chairman
Godfrey Blight
Managing Director, Sales & Marketing
GMAC-RFC Limited
Directors
John Heron
Managing Director
Paragon Mortgages Limited
Paul Howard
Director
Nationwide Specialist Lending
Colin Shave
Chief Executive Officer
GE Money Home Lending
Bob Young
Managing Director
CHL Mortgages
Executive Director
Peter Williams
Sarah Davidson, The Wriglesworth Consultancy ( 020 7427 1400 (Switchboard) ( 020 7427 1430 (Direct Dial) þ www.wriglesworth.com + 1 Pemberton Row, West Harding Street, LONDON, EC4A 3BG * s.davidson@wriglesworth.com
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