IMLA Mortgage Market Tracker Q1 2019 P r

IMLA Mortgage Market Tracker Q1 2019 P r

IMLA Mortgage Market Tracker Q1 2019 P r e p a r e d f o r t h e I n t e r m e d i a r y M o r t g a g e L e n d e r s A s s o c i a ti o n ( I M L A ) Contents 2 1 Background & methodology 2 Executive summary 3 Business volumes and confidence 4 Business flow Background & methodology Background & methodology The Intermediary Mortgage Lenders Association (IMLA) launched the Mortgage Market Tracker in November 2015. The Tracker uses data provided by BDRCs Project Mercury. Project Mercury is a continuous monitor of intermediary lender marketing effectiveness and broker sentiment, launched in 2007. Existing business confidence questions on the survey are supplemented by additional questions measuring the conversion of Decision In Principle (DIP) to completion. This report contains the results for Q1 2019. WHO? Mortgage Intermediaries advise customers on which lender to use, 24+ mortgages pa, not tied wholly to one lender, GB based. Sample sourced from Touchstone 4 HOW? Monthly telephone interviews (100 per month), average interview c.30 minutes. Fieldwork by PRS (our sister company) HOW MANY? Total of 300. Achieved sample weighted by firm size & type to be representative of Matrix Solutions universe profile Executive summary Executive summary Intermediary confidence has stabilised at the start

of the year having declined for successive quarters during 2018. Residential mortgages account for two thirds (68%) of an intermediarys workload, BTL (25%) a quarter, with Specialist the balance (8%). Business volumes also remain stable (81 cases in the last 12 months) as we enter the new year. Re-mortgages are the most significant area of activity (27% of all business). Business conversation rates improved in Q1 2019. Almost 6 in 10 DIPs (56%) resulted in a completion this quarter, up from 53% in Q4. The average broker moved a pool of 26 DIPs to 15 completions in the previous 3 months. 6 If we focus on the final stages of the process, 77% of full applications resulted in a completion this quarter, up from 72% 12 months ago. Business volumes and confidence Claimed volumes of mortgage cases, per year At an overall level, claimed case load volumes are relatively stable (at 81 cases) following a drop in Q3 18. The underlying business mix profile is unchanged since the end of the year. All mortgages Average business mix (% of all cases per year) Gross lending on all mortgages per qr (Source UK Finance)* Average no. of cases per year 125 88 100 85 77 82 72 73 69 74 77 80 81 87 86 100 90

27 Remortga... 68% residential 81 80 81 22 First Time Bu... 19 Mo (27) (22) (19) 75 75 16 BTL 1- 3 proper... 50 50 25% BTL Limited Co... 8 (6) (3) 3 25 *not published at time of this report Q1'19 Q4'18 Q3'18 Q2'18 Q1'18 Q4'17 Q3'17 Q2'17 Q1'17

Q4'16 Q3'16 Q2'16 Q1'16 Q4'15 Q3'15 Q2'15 Q1'15 25 0 7 BTL 4+ proper... (16) 0 8% Specialist 6 Adv Other specia... 2 (5) (3) Confidence in outlook Intermediary confidence has stabilised. Perceived outlook for the industry is significantly weaker than either the channel per se or an intermediarys own firm. for mortgage industry 67 68 60 54 53 2016 41 37 39 41 37 2 2 Q3; 2 02

2 Q2; Q1; 14 Q3; 1 1 0 Q4; 2017 Fairly confident QH1a. Currently, how confident do you feel about the business outlook for the mortgage industry? QH1b. And how confident do you feel about the business outlook for the intermediary sector of the mortgage industry? QH1c. And how confident do you feel about the business outlook for your own firm? Base: All respondents (300) 48 38 39 41 37 4 5 35 38 34 33 32 31 36 42 45 5 0 2 Q2; 2 Q4; Q1; 1 Q3; 1 Q4; 1 1 Q1; 13 Q3; 1 0 1 Q1; Q2; 01 Q3; 03 Q4; 04 0 2018 2019 Not very confident 2016 Not at all confident 2017 2 1 Q1

2 Q4; Q4; 1 1 49 Q1 Q2 Q3 Q4 2019 Q1; Q1; 1 13 44 46 Q1 Q2 Q3 Q4 2018 Very confident 9 64 59 64 64 Q1 Q2 Q3 Q4 Q1; Q2; 14 Q3; 1 1 0 Q4; 2017 59 60 58 61 Q1 3 Q3; 3 Q2; 15 04 Q1 7 1 2 Q2; Q1; 1 Q3; 12 14 2016

46 Q1 Q2 Q3 Q4 46 43 48 46 6 8 60 43 51 49 63 Q1 Q2 Q3 Q4 4 60 57 60 58 56 Q1 Q2 Q3 Q4 51 54 51 54 50 52 58 for own business 29 Q1 Q2 Q3 Q4 56 52 55 34 29 Q1 Q2 Q3 Q4 4 52 45 41

Q2 Q3 Q4 55 56 52 52 45 40 43 40 Q1 42 39 45 43 for intermediary sector 2018 2019 Net* intermediary confidence trends Net confidence levels have recovered following a steady decline across 2018. *Net confident = very / fairly confident minus not very / not at all confident 100 96 89 84 80 60 40 Own firm Intermediary channel 20 10 QH1a. Currently, how confident do you feel about the business outlook for the mortgage industry? QH1b. And how confident do you feel about the business outlook for the intermediary sector of the mortgage industry? QH1c. And how confident do you feel about the business outlook for your own firm? Base: All respondents (300) Q1 19 Q4 18 Q3 18 Q2 18 Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Q4 16

Q3 16 Q2 16 Q1 16 Q4 15 Q3 15 Q2 15 Q1 15 Q4 14 Q3 14 Q2 14 Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 0 Mortgage Industry Positive reasons for felt level of confidence in ones own business Reasons for feeling confident in their own business continue to be linked to qualities of their own business and strong reported business levels. Very confident 11 Fairly / not confident Qualities of this business Well established, good team, expanding team, hard working, experienced, large client base, honest and reliable, diversified (not reliant only on mortgages) Business is strong Growing, getting busier, new clients, good retention, repeat business, referrals / recommendations from clients or other professionals

Positive market backdrop People will always want to buy a home, demand for re-mortgages will rise, new builds going up Demand for intermediaries/ advice More people turning to brokers/ need advice banks reducing number of advisors, banks closing branches Future outlook more stable Expect things to settle down after Brexit Negative reasons for lower confidence in ones own business Brexit is the key factor causing intermediaries to feel less confident about the outlook for their business, followed by general uncertainty in the market. Fairly/ not confident 12 Brexit Brokers are now more certain that Brexit will negatively impact their business Uncertainty How will market changes impact business? What influence will Robo Advice have on future success? Slow down in business Less business than before. Market slowing down/ quieter Reasons for felt level of confidence in own business Examples of verbatim responses from intermediaries Business is strong Positive market backdrop More demand for

intermediaries We are a good strong business with a really very strong client base and if we forget someone they call us. (Very Confident) Because it is extremely busy. Busier than I have known it for a long time. (Very Confident) We have a strong market at the moment. and this is January. So think things will carry on this strong. (Very Confident) The direct approach to the high street lenders for a mortgage is disappearing. Clients are increasingly appreciating the brokers value.. (Very Confident) Future outlook more stable Brexit Uncertainty Slow down in business I think once Brexit is out of the way things will go back to normal. First time buyers are coming back into the market. (Fairly Confident) This is due to the uncertainty of BREXIT, it raises queries when dealing with EU citizens, whether or not they will be staying. Also makes getting insurance in such cases difficult. (Not very confident) We have clients but the general uncertainty at present is a concern. (Not very confident) Because the market is quiet. Uncertainty. (Fairly confident) Qualities of this business 13 Business flow Average number of DIPs in last 3 months The number of DIPs that the average intermediary has dealt with remains relatively stable this quarter at 26, will little variation across the quarter. Q3 2017: 31 Q4 2017: 29 Q1 2018: 31

Q2 2018: 27 Q3 2018: 27 Q4 2018: 28 Q1 2019: 26 37 15 27 29 Jul Aug 30 Sep Oct 29 Nov 28 Dec 32 Jan QHX1. In the last 3 months, approximately how many DIPs have you dealt with personally? Base: All Q1 respondents (300) 32 Feb 28 Mar 32 31 24 26 Apr May 26 Jun

Jul 30 24 Aug Sep Oct 27 26 27 26 26 Nov Dec Jan Feb Mar Average number of DIPs By business The average number of DIPs dealt with has increased among larger businesses. It has decreased among those dealing with mover and other specialist mortgages. Q4 2018 Q1 Directly author... 28 Appointed representa... 42 3-5 (sales dec... 20 9-10 (sales dec... 20 First time bu... Buy to l... Other specialis... 16 QHX1. In the last 3 months, approximately how many DIPs have you dealt with personally? Base: All Q1 respondents (300) 38 (+4) 28 (-2) 24 (-4)

24 (-4) 26 6-8 (sales dec... Remortg... 28 (=) 28 (-3) 25 1-2 (sales dec... Mo 28 (-2) 26 27 (+1) 29 (-5) 24 (+2) 30 (-3) 31 (-5) 28 24 26 27 26 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed DIPs resulting in a DIP accept (%) The average proportion of DIPs resulting in a DIP reached a record high in Q1 2019, at 86%. DIP accepts were highest in January. Q3 2017: 82 17 81 81 Jul Aug Q4 2017: 82 Q1 2018: 82 84 82 82 83 82

83 Sep Oct Nov Dec Jan Feb QHX2. In the last 3 months, what proportion of these DIPs have resulted in a DIP accept? Base: All Q1 respondents (300) 80 Mar Q2 2018: 84 84 86 Apr May Q3 2018: 84 Q1 2019: 86 Q4 2018: 84 83 84 83 85 83 82 Jun Jul Aug Sep Oct Nov 86

87 87 86 Dec Jan Feb Mar DIPs resulting in a DIP accept (%) By business There is relatively little difference in conversion from DIP to DIP accept by mortgage type and size of business, with increases across all categories this quarter. Q4 2018 Q1 86 84 (+2) Directly author... 86 83 (+3) 84 (+3) Appointed representa... 1-2 (sales dec... 88 3-5 (sales dec... 85 6-8 (sales dec... 85 9-10 (sales dec... 88 First time bu... 86 Mo 86 Remortg... Buy to l... Other specialis... 18 87

QHX2. In the last 3 months, what proportion of these DIPs have resulted in a DIP accept? Base: All Q1 respondents (300) 87 86 85 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed 86 (+2) 84 (+1) 83 (+2) 82 (+6) 84 (+2) 82 (+4) 82 (+5) 84 (+2) 82 (+3) DIP accepts resulting in a full application (%) The average proportion of DIP accepts resulting in a full application increased again in Q1 reaching 84%. Q3 2017: 81 81 Jul 19 81 Aug 81 Sep Q4 2017: 80 82 Oct 79 Nov 80 Dec Q1 2018: 76 Q2 2018: 84 83 78 77 Jan

Feb QH3. In the last 3 months, what proportion of these DIP accepts have led to a full mortgage application? Base: All Q1 respondents (300) 85 Q3 2018: 80 82 81 Jun Jul 74 Mar Apr May Q1 2019: 84 Q3 2018: 82 78 80 81 81 Aug Sep Oct Nov 84 84 85 84 Dec Jan Feb Mar DIP accepts resulting in a full application (%) By business Conversion from DIP accept to full application is slightly higher among larger firms. There is little difference in

conversion levels by the type of mortgage handled. Q4 2018 Q1 84 82 (+2) Directly author... 84 83 (+1) 82 (+3) Appointed representa... 85 1-2 (sales dec... 85 3-5 (sales dec... 6-8 (sales dec... 81 84 9-10 (sales dec... First time bu... 84 Mo 84 Remortg... 84 Buy to l... 84 Other specialis... 20 88 QH3. In the last 3 months, what proportion of these DIP accepts have led to a full mortgage application? Base: All Q1 respondents (300) 83 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed 79 (+6) 84 (-3) 81 (+3) 85 (+3)

79 (+5) 83 (+1) 84 (=) 81 (+3) 81 (+2) Full applications resulting in an offer (%) The proportion of full applications resulting in an offer remains strong and stable over time. Q3 2017: 88 21 Q4 2017: 88 Q1 2018: 88 Q2 2018: 88 87 88 90 89 88 86 88 88 87 88 89 Jul Aug Sep Oct Nov Dec Jan Feb Mar April May

QH4. In the last 3 months, what proportion of your full applications have led to an offer? Base: All Q1 respondents (300) 86 Jun Q3 2018: 88 89 Jul Q1 2019: 89 Q4 2018: 89 86 88 88 88 90 89 90 89 Aug Sep Oct Nov Dec Jan Feb Mar Full applications resulting in an offer (%) By business Conversion from full application to offer shows little variance by firm size and type of mortgages dealt with. Q4 2018 Q1 Directly author... Appointed representa... 89 88 90 1-2 (sales dec... 3-5 (sales dec...

91 88 6-8 (sales dec... 9-10 (sales dec... First time bu... 87 90 Mo 89 Remortg... 89 Buy to l... 89 Other specialis... 22 91 QH4. In the last 3 months, what proportion of your full applications have led to an offer? Base: All Q1 respondents (300) 91 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed 89 (=) 88 (=) 89 (+1) 89 (+2) 88 (=) 89 (+2) 89 (-2) 89 (+1) 87 (+2) 89 (=) 87 (+2) 88 (+3) Offers resulting in a completion (%) The proportion of offers resulting in a completion softened slightly this quarter to 86%. Q3 2017: 86 87 Jul 23 84

Aug Q4 2017: 86 88 87 Q1 2018: 82 88 82 Sep Oct Nov Dec 85 Jan Q2 2018: 85 81 82 84 Feb Mar Apr QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) Q3 2018: 82 88 May Q4 2018: 87 82 84 82 80 Jun Jul Aug

Sep Q1 2019: 86 87 86 88 87 86 86 Oct Nov Dec Jan Feb Mar Offers resulting in a completion (%) By business Intermediaries dealing with first time buyer mortgages see the biggest drop in conversion from offer to completion this quarter. Q4 2018 Q4 Directly author... Appointed representa... 86 85 86 1-2 (sales dec... 84 3-5 (sales dec... 84 6-8 (sales dec... 9-10 (sales dec... First time bu... Mo Remortg... Buy to l... Other specialis... 24 QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) 89 87

84 86 87 86 87 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed 87 (-1) 87 (-2) 86 (=) 87 (-3) 85 (-1) 86 (+3) 89 (-2) 89 (-5) 82 (+4) 87 (=) 85 (+1) 87 (=) Conversion from DIP to completion Almost 6 in 10 DIPs resulted in a completion this quarter, an increase vs. Q4. Conversion remains strongest in the second half of the business flow funnel. # clients Initial pool of DIPs (average number of DIPs in last 3 months) 26 Conversion of DIPs to DIP accepts: 86% (vs. 84% in Q4) Pool of DIP accepts 23 Conversion of DIP accepts to full applications: 84% (vs. 82% in Q4) Pool of full applications 19 Conversion of full applications to offers: 89% (vs. 89% in Q4) Pool of offers 17 Conversion of offers to completions: 86% (vs. 87% in Q4) Pool of completions 25 15 QHX1. In the last 3 months, approximately how many DIPs have you dealt with personally? QHX2. In the last 3 months, what proportion of these DIPs have resulted in a DIP accept? QH3. In the last 3 months, what proportion of these DIP accepts have led to a full mortgage application?

QH4. In the last 3 months, what proportion of your full applications have led to an offer? QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) Conversion of DIPs to completions: 56% (vs. 53% in Q4) Conversion from DIP to completion By business Conversion from DIP to completion has gone up across those dealing with all different mortgage types. Q4 2018 Q1 Directly author... 56 54 Appointed representa... 57 1-2 (sales dec... 3-5 (sales dec... 58 51 6-8 (sales dec... 58 9-10 (sales dec... First time bu... Mo Remortg... Buy to l... Other specialis... 26 QHX1. In the last 3 months, approximately how many DIPs have you dealt with personally? QHX2. In the last 3 months, what proportion of these DIPs have resulted in a DIP accept? QH3. In the last 3 months, what proportion of these DIP accepts have led to a full mortgage application? QH4. In the last 3 months, what proportion of your full applications have led to an offer? QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) 59 54 55 57 55 56 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed 53 (+3) 53 (+1) 53 (+4) 52 (+6)

53 (-2) 52 (+6) 56 (+3) 52 (+2) 50 (+5) 54 (+3) 51 (+4) 50 (+6) Conversion from full application to completion Over three-quarters (77%) of full applications resulted in a completion, stronger than the levels seen in Q1 2018 (72%). Pool of full applications 19 Conversion of full applications to offers: 89% (vs. 89% in Q4) Pool of offers 17 Conversion of offers to completions: 86% (vs. 87% in Q4) Pool of completions 27 15 QHX1. In the last 3 months, approximately how many DIPs have you dealt with personally? QHX2. In the last 3 months, what proportion of these DIPs have resulted in a DIP accept? QH3. In the last 3 months, what proportion of these DIP accepts have led to a full mortgage application? QH4. In the last 3 months, what proportion of your full applications have led to an offer? QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) Conversion of full applications to completions:77% (vs. 77% in Q4 and 72% Q1 2018 ) Conversion from full application to completion (%) Conversion from full application to completion is stable compared to last quarter, although it dropped slightly between January and March. Q3 2017: 76 75 Jul 28 79 74 Aug Q4 2017: 75

77 78 71 Sep Oct Nov Dec Q1 2018: 72 75 Jan 71 71 Feb Mar QH4. In the last 3 months, what proportion of your full applications have led to an offer? QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) Q2 2018: 75 75 Apr 79 71 May Jun Q3 2018: 72 75 Jul 70 70 Aug Sep Q4 2018: 77 76 76

Oct Nov Q1 2019: 77 79 78 77 76 Dec Jan Feb Mar Conversion from full application to completion By business Conversion from full application to completion is slightly higher among those dealing with other specialist mortgages this quarter. Q4 2018 Q1 Directly author... 75 Appointed representa... 1-2 (sales dec... 3-5 (sales dec... 78 77 74 6-8 (sales dec... 75 First time bu... 75 Remortg... Buy to l... Other specialis... 29 81 9-10 (sales dec... Mo QH4. In the last 3 months, what proportion of your full applications have led to an offer? QH5. And in the last 3 months, what proportion of your clients mortgage offers have led to a completion? Base: All Q1 respondents (300) 77 (=)

77 76 77 76 79 * At least 4 out of every 10 residential mortgages placed ** At least 2 out of 10 mortgaged placed *** Any mortgages placed 77 (-2) 77 (+1) 77 (=) 75 (-1) 77 (+4) 80 (-5) 79 (-4) 72 (+4) 77 (=) 74 (+2) 76 (+3) Any questions MARK LONG, DIRECTOR +44 (0) 20 7400 1016 +44 (0) 20 7400 0396 +44 (0) 7966 454 958 [email protected] [email protected] 30 SAM BURTON, RESEARCH DIRECTOR

Recently Viewed Presentations

  • The iron content of runoff from a banana

    The iron content of runoff from a banana

    The iron content of runoff from a banana ranch is a necessary analytical parameter to analyze. A 25.0mL sample of the runoff was acidified with HNO3 and treated with excess KSCN to form a red complex.
  • High Performance Computing 811 - smu.ca

    High Performance Computing 811 - smu.ca

    Computational Methods in Physics PHYS 3437 Dr Rob Thacker Dept of Astronomy & Physics (MM-301C) [email protected] Today's Lecture Use MC techniques to simulate a random walk A few slides on random number generators Mobility of molecules Consider a single molecule...
  • Welcome [oscar.iitb.ac.in]

    Welcome [oscar.iitb.ac.in]

    Welcome. This is a document to explains the chosen concept to the animator. This will take you through a 5 section process to provide the necessary details to the animator before starting the animation.. The legend on the left will...
  • Women and Oppression - Janine Bradley

    Women and Oppression - Janine Bradley

    Using the Counseling Forces. Psychodynamic - Not always well-suited for women, ties to the patriarchy, too much reliance on unconscious sexual tensions, rigid power structure between counselor and client
  • Level 7 experiments workshop

    Level 7 experiments workshop

    Outline process for increasing understanding of new curriculum and associated assessment standards. Share planning for experiments at level 7. Increase understanding of different types of investigations involving experimental situations
  • HCI - dauaa.org

    HCI - dauaa.org

    hci mission Execute DoD-wide acquisition workforce governance, strategies, policies and talent management initiatives to equip a highly qualified workforce of professionals in acquiring and delivering world-class Warfighting capabilities to our Soldiers, Sailors, Airmen, and Marines.
  • Paris, Switzerland & Italy July 3, 2014 -

    Paris, Switzerland & Italy July 3, 2014 -

    The Experience is Everything. Educational travel is a vital part of a. complete education. It expands views, promotes understanding, and provides. first-hand experiences of classroom
  • Verbals - Welcome to our ENG 3UI website

    Verbals - Welcome to our ENG 3UI website

    Verbals. Gerunds, Participles and Infinitives. The term verbal indicates that a gerund, like the other two kinds of verbals, is based on a verb and therefore expresses action or a state of being. Gerunds. A gerund is a verbal ending...