Brokers expectations for future business improve slightly

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."