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Renewed Confidence in Mortgage Market Boosts Buy-to-Let Market

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    Mortgage Intermediaries Optimistic for Future

    The Intermediary Mortgage Lenders Association (IMLA) has recently published a survey with results suggesting that confidence has returned to the mortgage market, showing improvement for each month in Q4 2023.

    This is according to the Mortgage Market Tracker, which uses a representative sample of 300 mortgage intermediaries, collecting the data through telephone interviews and fieldwork.

    Rising interest rates have made mortgages more unaffordable over the last year, and intimidating rates have often been cited as part of the reason why the property market has been sluggish as of late. Mortgage worries have left many investors wondering if buy-to-let is still worth it.

    However, the results of this survey suggest a more positive outlook is starting to take shape among those in the mortgage industry. Rates are becoming more competitive among lenders, which may lead to a more buoyant market and enthusiasm for BTL investment.

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      92% of Participants Confident in Business Outlook

      According to the report, intermediary confidence has finally started recovering for the mortgage industry (+17) and intermediary sector (+4) in the final quarter of 2023. While confidence in the respondents’ own firm is down slightly by 2 points, it still retained a high number, standing at a net score of 84. All three of these scores are below long-term norms, but the recovering numbers and increased confidence in the ‘own firm’ outlook are giving a more positive picture than previously.

      Regarding the month-by-month breakdown of confidence for the respondent’s firm, participants became more positive as the quarter progressed, with 92% replying that they were confident in the business outlook in December 2023.

      When it comes to proportions of mortgage types, residential mortgages still make up most of the mortgage market, making up two-thirds, while buy-to-let mortgages account for around one-quarter. IMLA states that there are no significant changes in the share of mortgage types that make up the market.

      Read More: Get the latest on buy-to-let properties for sale in the UK and how to get started with our property investment for beginners guide!

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      Confidence in Wider Market Improving

      Sentiment is also becoming more positive in various aspects of the UK property market, which may explain why confidence is returning to professionals in the mortgage market.

      The latest market survey from the RICS shows increased confidence among real estate professionals in regard to the sales market, as well as the current rental sector. When asked about the outlook for sales in the next three months, respondents to the survey showed improved confidence, and they were even more optimistic about sales volumes over the next twelve months, with a net balance of +44%.

      Recent research backs up the high sentiment among property professionals in late 2023 and early 2024. Reports from sources such as Halifax have called January figures a ‘positive start to 2024’, contributing to ‘increased confidence among buyers and sellers’.

      Further Reading: Learn more about the UK property market with some of our latest buy-to-let area guides covering topics like Brighton investment properties and buy-to-let Basingstoke.

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      Jessica Ferris

      Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.

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