"As interest rates and affordability gradually improve, and as more lenders implement looser regulation such as the increased loan to income flow limits, we hope to see greater momentum return to the mortgage market in the second half of the year."
- Kate Davies, executive director of IMLA
Recent figures published by the Bank of England have shown a steep fall in overall gross secured lending from £76b in Q1 to £58b in Q2 2025.
Although confidence held firm, mortgage brokers reported that the number of decisions in principle (DIPs) made for clients dealt with falling to 30 (33 in Q1) and the average conversion from full application to completion decreasing to 61% - the lowest rate since the end of 2023.
Conversion from DIP to completion also declined by 7%, matching the level seen in Q4 2024.
Mortgages made up two-thirds of brokers’ business, with buy-to-let (BTL) accounting for less than 25% - but despite concerns around the impact of the Renter’s Rights Bill, IMLA chief Kate Davies says the market remains 'reassuring'.
“Q2’s figures reflect the front loading of mortgage business in Q1 this year caused by the end of the stamp duty holiday in April.
“They also reflect a market adjusting to tighter than anticipated economic conditions, given the slow pace of base rate cuts and continued pressure on household finances,” explained Kate Davies, executive director of IMLA (pictured).
She said: “Activity in the BTL sector remains reassuringly buoyant, particularly in light of the concerns many have expressed over the imminent legislative changes the Renters’ Rights Bill will impose on landlords.
“This is an industry used to navigating uncertainty, and brokers are continuing to support customers through a complex lending environment.”
“As interest rates and affordability gradually improve, and as more lenders implement looser regulation such as the increased loan to income flow limits, we hope to see greater momentum return to the mortgage market in the second half of the year,” Kate concluded.
