Number of first time buyers completing mortgages via intermediaries at three year high

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The completion rate for mortgage offers to first time buyers in the UK via intermediaries reached a three year high of 89% in the fourth quarter 2018, new figures from the industry show.

Overall, the rate of completed mortgage offers for first time buyers handled by mortgage intermediaries increased by 8%, up from 81% in the third quarter of 2018 and 20% more than in the first quarter of 2016 when mortgage brokers reported that only 69% of first time buyer offers reached completion.

The latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA) also shows that as well as strong first time buyer figures, mortgage intermediaries reported stronger completion rates across the board in the last quarter of 2018.

Indeed, the fourth quarter of 2018 saw a 5% increase in overall mortgage completions, up to 87% from the previous quarter, and the highest overall reported completion rate recorded by the IMLA Mortgage Market Tracker. Remortgage activity also ended strongly in 2018 with quarterly figures for up by 4% to 87%.

Buy to let lending was also more positive even in the face of increased landlord regulatory obligations dampening the sector in 2018. Offers to completion rose 3% to 85%, according to intermediaries.

This positive trend for broker business looks set to continue in 2019 despite Brexit concerns. The IMLA recently predicted that mortgage lending via intermediaries will rise to £169 billion this year as the share of lending introduced by intermediaries rises to 75% in 2019 and 76% by 2020.

However, despite these positive figures, the Mortgage Market Tracker found that broker confidence has ebbed a little as brokers continue to experience a Brexit ‘uncertainty effect’. Mortgage intermediaries recognise that Brexit has the potential to adversely affect their businesses, with the percentage of brokers who professed to be very confident about their own business falling from 60% to 54% in the fourth quarter of 2018, the second dip in confidence in as many quarters.

‘It is encouraging to see that when an intermediary does apply for a loan on their client’s behalf, they are being accepted and completed at growing rates. Mortgages going from offers to completions are at more than three year highs as intermediaries and lenders continue to find solutions for clients,’ said Kate Davies, IMLA executive director.

‘It’s significant that intermediaries are able to demonstrate such a high success rate, especially when helping first time buyers to navigate the complexities of an increasingly competitive and complex mortgage market. This is particularly true for those taking out Help to Buy equity loans, who may need even more expert guidance,’ she explained.

The IMLA predicts that mortgage intermediaries will account for a growing share of the mortgage market this year and into 2020 and Davies said that these figures underline our firm belief that, during times of uncertainty, people still seek out a seasoned expert to help guide them through complex financial decisions.

‘That said, even in the face of such strong evidence about brokers’ effectiveness, it’s not surprising that brokers themselves share the current general uncertainty about the future. But, whatever the outcome of the current Brexit negotiations, we are confident that brokers will continue to play an essential part in guiding borrowers through the market,’ she concluded.

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Written by: Houseladder