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MAB increases completions and mortgage market share and strengthens lead gen partnerships – results

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  • 23/03/2021
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MAB increases completions and mortgage market share and strengthens lead gen partnerships – results
Mortgage Advice Bureau (MAB) bucked the market trend by increasing its mortgage completions, market share, adviser numbers and revenue during 2020 despite the pandemic.

 

The advice network completed £17.6bn worth of mortgages including product transfers last year, up five per cent from £16.7bn in 2019, according to its annual results.

This was driven primarily by product transfers which were up a remarkable 50 per cent to £2.3bn from £1.5bn in 2019, although new mortgage lending also ticked up slightly from £15.2bn to £15.3bn.

MAB said this gave it a 6.3 per cent market share of new mortgage lending which was up more than a tenth from the 5.7 per cent in 2019.

Overall, the new mortgage lending market dipped nine per cent from £268bn to £243bn in 2020.

Adviser numbers rose eight per cent to 1,580 at the end of the year which included 97 at First Mortgage, which gained fifteen new brokers during the period.

Revenue was up three per cent to £148.3m from £143.7m including £14.7m from First Mortgage and gross profit was up nine per cent to £39.8m.

However, MAB’s statutory profit before tax dipped 16 per cent to £14.9m from £17.7m.

The firm put its weight behind criticism of the “unfair” Financial Services Compensation Scheme levy which it said would cost it around £1.5m in 2021.

“The reaction of other mortgage intermediaries to this unfair allocation of levies has been widely reported and MAB is supporting the challenge by the Association of Mortgage Intermediaries (AMI) so that future levies can become better signposted and fairer,” it said.

 

Boomin partnership and lead generation

MAB will also be increasing its lead generation strategy which it believes will become a major new contributor to its growth plans.

It revealed a partnership with property site Boomin is on the horizon to provide mortgage services across various parts of its platform, following on from similar agreements with Moneybox and its Home Buying Buddy app.

This is part of its aim to widen its customer base by interacting with prospective borrowers sooner.

“Although MAB appointed representative (AR) firms have typically sourced, acquired and serviced customers largely or wholly through their own contacts and relationships, MAB will now be playing an increasingly important role in adding to that lead flow,” it said.

“Reliability, quality and scalability of lead flow drives every aspect of adviser and firm performance, and MAB’s unique business model is key to our ability to drive meaningful lead flow through our partner firms.

“This strategy will in turn increase adviser productivity, drive organic adviser growth and AR firm recruitment, and further enhance consumer brand awareness,” it added.

Chief executive Peter Brodnicki (pictured) noted MAB had seen its pipeline of new ARs build strongly.

However he said that as MAB mainly focused on recruiting larger AR firms, some of these discussions had been delayed by Covid-related restrictions and as a result were unable to conclude at present.

“When restrictions are lifted, we expect these discussions can be quickly concluded,” he said.

 

Protection and GI revenue

Figures published alongside the results showed MAB generated almost as much revenue from protection and general insurance sales and mortgage completions.

In 2020 45 per cent of all revenue totalling £67.2m came from mortgage procuration fees with 40 per cent of revenue totalling £58.8m from protection and general insurance commission.

This 45 per cent to 40 per cent split was almost identical to the previous year.

It added that since the end of December, it had secured a strong business pipeline, increased adviser numbers by four per cent to 1,637 and taken a 25 per cent stake in FM North East through First Mortgage.

 

Strong position

Brodnicki continued: “These results once again demonstrate the resilience of our operating model and the quality and dedication of our management team and staff during a year of exceptional challenges.

“We took quick and decisive action in response to the pandemic that resulted in us not only coming through an incredibly difficult period in great shape and ensuring that our 2020 strategic objectives were met, but also putting ourselves in a strong position to start accelerating growth over the next few years.

“Despite the impact of the pandemic, our profitability and cash generation profile remained strong, which enabled us to reimburse all the government furlough grant income received.”

He also noted that the underlying fundamentals driving levels of consumer demand for housing were strong.

“This level of demand, coupled with the chancellor’s announcements earlier this month of the launch of a mortgage guarantee scheme, an extension of the stamp duty holiday until the end of June and the nil rate band being doubled until the end of September, and the signposted easing and removal of lockdown restrictions, are likely to improve housing activity further,” he added.

 

 

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