Mortgage growth fuels Aldermore profits

The specialist lender lent over £2bn to homebuyers, landlords, SMEs and housebuilders, and said mortgage growth was instrumental in delivering record profits of £133m, up 34% on 2015.

Buy to let was a huge growth area for Aldermore in 2016 – up 38% to £3.3bn, with a 25% rise in customers to around 20,000 landlords. The lender said it was able to take advantage of the market spikes in the first quarter, ahead of the introduction of an increase in Stamp Duty, and in the fourth quarter, successfully share in an active market.

Meanwhile, total residential lending rose 7% to £1.5bn and SME commercial mortgages rose 12% to £930m.

In residential lending, £466m of originations more than offset a high level of redemptions on Help to Buy mortgages written two years ago. Aldermore continues to serve specialist segments of the residential mortgage market, including self-employed and first time buyers.

However, Charles Haresnape, group managing director for mortgages, is to leave the firm after six years to become chief executive of Gatehouse Bank, a Shariah-compliant investment bank. He will remain in post until a replacement is found.

He said: “2016 has been a fantastic year for Aldermore with growth across all our business divisions. We’ve continued supporting homeowners, landlords, SMEs and house builders.

“Our buy-to-let offering continues to prove popular with both individual and corporate landlords, increasing lending by more than a third (38%) year on year to £3.3bn. We have also enhanced our propositions for first time buyers and self-employed customers and our committed approach to truly understanding the detailed needs of our customer’s enabled us to provide over £2bn in new mortgage lending in 2016.”

Aldermore’s lending continues to be primarily funded by deposits, which increased 16% to £6.7bn, including SME deposits rising by 18% to £1.6bn.