Broker confidence wobbles post-Budget

Intermediary optimism for their own businesses and sector remains strong, even as overall mortgage market confidence dips.

The UK mortgage market showed signs of cautious optimism during 2024, but the latest Mortgage Market Tracker from the Intermediary Mortgage Lenders Association (IMLA) reveals that the October Budget dampened confidence in the broader industry heading into 2025.

While brokers remain resilient and confident in their own operations, market-wide sentiment appears to have stalled as market confidence remains fragile, reverting to levels last seen at the start of the year.

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Confidence Retraces After a Promising Mid-Year Recovery

Throughout the second and third quarters of 2024, confidence among intermediaries had gradually improved, with sentiment across the wider mortgage market returning to what IMLA described as a “long-run, pre-Truss norm.” But by Q4, much of that progress had been undone.

In the final quarter of 2024:

• Only 22% of brokers said they felt very confident about the overall mortgage market outlook.

• 65% were fairly confident.

• 10% were not very confident, and

• 2% were not at all confident.

These numbers are almost identical to those reported in Q1 2024, suggesting the Budget announcement in October had a direct cooling effect as market confidence remains fragile.

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Intermediary Sector Enjoys Higher Confidence Ratings

While overall market sentiment faltered, brokers remained more optimistic about the intermediary sector itself. In December, 41% of intermediaries said they felt very confident in the sector, and a further 51% said they were fairly confident.

This steady improvement over Q4 points to a general belief among brokers that the intermediary model remains strong and adaptable—even as external pressures mount.

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Confidence in Brokers’ Own Businesses Remains Robust

Confidence in their own businesses was, once again, the highest of the three measures tracked. In Q4:

• 42% of brokers were very confident about their own firm’s outlook.

• 53% were fairly confident.

These numbers strengthened further by December, with a notable 56% of brokers expressing very high confidence, and 41% fairly confident. This sustained optimism suggests brokers feel well-positioned to weather short-term market shifts and continue delivering value to clients.

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Business Composition Remains Stable Across Sectors

The split of business handled by intermediaries in Q4 2024 remained consistent with earlier quarters:

• Residential lending continued to account for approximately two-thirds of all activity.

• Buy-to-let dipped slightly to 22%, reflecting some of the pressure landlords are facing.

• Specialist lending rose modestly to 12%, in line with growing complexity in borrower circumstances.

Within the residential sector:

• First-time buyers remained the most prominent group, representing around a third of all cases.

• Remortgages and product transfers were evenly matched, each comprising just under a quarter of the market.

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External Pressures Shape Broker Sentiment

The IMLA report notes that October’s Budget—widely seen as cautious and short on housing-focused stimulus—had a broad negative impact on economic sentiment, including within the mortgage market.

However, November’s interest rate cut and a more dovish tone from the Bank of England offered a late-year boost to sentiment, particularly for intermediaries confident in their own operations.

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Expert View: Kate Davies, Executive Director, IMLA

“October’s Budget dealt a blow to UK confidence across the board, including the mortgage market. However, November’s interest rate cut and a more dovish approach from the Bank of England may have contributed to the boost in sentiment at the end of the year.

“Throughout 2024, intermediaries have consistently expressed more confidence in their own businesses than the market itself, which is testament to their faith in their ability to keep delivering in the face of adversity.

“When it comes to sub-sectors of the market, it is no surprise that buy to let has contracted slightly given the current conditions, the increase in Stamp Duty and the looming Renters’ Rights Bill, while a gradual rise in the proportion of specialist cases makes sense in an increasingly complex and challenging economic environment.

“It will be interesting to see whether remortgaging starts to take dominance over product transfers in the year ahead, as falling rates should improve affordability and provide more opportunities for existing borrowers to shop around the whole market with the help of their broker.”

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Looking Ahead: Opportunities Despite Uncertainty

With over 1.8 million borrowers expected to come off fixed-rate deals in 2025, the potential for increased remortgaging activity could provide a key opportunity for intermediaries.

While broader market confidence remains fragile, the resilience of brokers and the enduring strength of the intermediary model may prove to be defining advantages in the year ahead.

As interest rates gradually fall and affordability improves, 2025 could bring a welcome shift from product transfers back toward full market remortgages—opening the door for brokers to re-engage with clients in a more competitive landscape.