Demand in the mortgage market dipped in the third quarter of 2022, according to the Intermediary Mortgage Lenders Association (IMLA).

The latest data from IMLA’s Mortgage Market Tracker showed that average intermediary case volumes decreased from 97 in Q2 to 93 in Q3 – a drop of just over 4%.

However, the IMLA pointed out that, despite this and likely in part due to house price increases, the Bank of England reported nearly £85bn in gross lending on all mortgages in Q3, the highest number seen since Q2 2021, when it was aided by the stamp duty holiday.

The IMLA also reported that intermediary confidence in the business outlook for their own firms remained stable, with 51% stating that they were ‘very confident’, down slightly from 52% in Q2. There was a similar pattern for confidence in the outlook for the intermediary sector, with 91% of intermediaries confident overall, down from 93% in Q2.

However, confidence among intermediaries in the outlook for the mortgage industry fell noticeably, with the IMLA research revealing that only 81% of intermediaries were confident overall in Q3, falling from 89% in Q2.

The average number of Decisions in Principle (DIPs) that intermediaries processed remained stable in the third quarter, albeit down slightly to 27, from 28 in Q2. However, levels picked up in September (28 per intermediary), comparing favourably to the beginning of the quarter in July (26 per intermediary).

In Q3, conversion rates from DIP to completion fell for the fourth successive quarter to 38%, from 44% in Q2 – 10% lower than Q3 2021.

Kate Davies, executive director of the IMLA commented: “It’s good to see that intermediaries are very confident in the business outlook of their own firms – it’s clear from our data this quarter that advisers are still very busy, with many saying that their overall workloads have increased.”

“This is hardly surprising – the cumulative effects of the cost-of-living crisis, high inflation and higher interest and mortgage rates are creating increasingly complex circumstances for borrowers. This in turn makes the role of professional mortgage advisers more important than ever,” Davies added.