In its 2016 full year results, the group said mortgages completed through its financial services division accounted for 7% of overall gross mortgage lending in the market; estimated at £246bn by the Council of Mortgage Lenders.
Some 623 appointed representatives (AR) operate within LSL’s combined mortgage networks, First Complete and Pink Home Loans, making them the second-largest network in the UK. Within these AR firms, there are 1,650 total sellers.
The group bolstered its presence in the mortgage intermediary market with the acquisition of Group First in February. It holds a 65% stake in the mortgage and protection firm.
As the group jostles for a larger share of intermediated mortgage sales, it has taken a noticeable step back from its exposure to the property sales market. In the second half of the year, LSL disposed of its entire shareholding in online property sales portal Zoopla.
LSL chairman Simon Embley (pictured) said after a strong H1 performance in its estate agency division in the run up to the Stamp Duty changes on 1 April, the group took decisive action, following the EU referendum result, to protect its balance sheet. It employed cost-cutting measures, closed estate agency branches and sold its interest in Zoopla, while pausing other acquisition activity.
Profit before tax rose 65% year-on-year from £38.6m to £63.5m after receiving £32.9m from the sale of its Zoopla shares. The group saw a rise in lettings income of 9% and said it plans to monitor the government’s plans to ban letting agent fees, and will contribute to the consultation on the proposal.
Overall, the estate agency division reported a 3% rise in revenue. However, revenue from Marsh & Parsons fell 5% to £33.5m while profits plummeted 36% to £4.4m.
Group chief executive Ian Crabb attributed this to a ‘challenging prime central London market, compounded by the result of the EU referendum which caused transaction levels to drop significantly’. Marsh & Parson’s residential sales transactions dropped 12%.
Looking ahead, Embley said 2017 was likely to see a reduced volume of house purchase transactions compared to last year, with modest house price inflation predicted outside prime central London.
However he added that “mortgage costs and availability remain positive and the medium to longer term fundamentals of the UK housing market remain robust.”