Strong demand in the mortgage market has helped keep sustained intermediary confidence during the third quarter of 2020, according to new research from the Intermediary Mortgage Lenders Association (IMLA).

However, brokers are still “treading with caution”, the association warned.

IMLA’s latest Mortgage Market Tracker, based on responses from 300 brokers, found that 82% of intermediaries were either “fairly” or “very” confident about the sector’s prospects – the same percentage as in the first two quarters of 2020, despite the outbreak of coronavirus.

The data also showed that brokers were growing in confidence about the future of the intermediary market. The survey found that 94% were upbeat about the sector, compared to 88% in Q2, while intermediaries were also increasingly positive about the future of their own businesses – with 95% saying they were either “fairly” or “very” confident.

IMLA executive director, Kate Davies, commented: “Demand is still high in the mortgage market as consumers try to take advantage of the stamp duty holiday, but brokers are clearly treading with caution.

“Intermediaries were already feeling less confident about the market in September, with a second wave of COVID-19 on the horizon and now England has moved back into a second lockdown.

“The good news is that the housing market remains open and buyers eager to move can still press ahead with their plans. This is keeping brokers and lenders incredibly busy and facing their own challenges to manage capacity, but it also means that the housing market remains a driving force in the economy.”

IMLA’s research revealed that confidence was beginning to decline in September, however. The percentage of brokers feeling upbeat about the wider mortgage market had sat at 84% in August, but amid rising COVID-19 cases, local lockdowns and the prospect of a second wave of the virus, confidence fell to 77% in September.

The association suggested this shows that advisers have largely blamed stricter lending criteria, economic uncertainty and fears about a cliff edge with the end of furlough – at the time set to end on 31 October – as the key reasons behind their concerns. The findings also indicated that the average number of cases brokers handled fell to 81 in September, down from 94 in August.

Davies added: “Next year the market still faces a significant challenge with a triple deadline on 31 March 2021, as the current Help to Buy scheme, furlough and the stamp duty holiday all come to an end.

“The prospect of this cliff-edge moment means that working together as an industry – lenders, intermediaries, conveyancers and surveyors – is all the more important as we try to manage the  surge in demand with buyers rushing to complete before it’s too late.”

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