In a trading update for the first half of the year, the company said it started 2023 with a “lower than expected” pipeline of written mortgages and new appointed representative (AR) firms. Its existing AR firms also “focused on efficiency and paused recruitment, leading to a reduction in adviser numbers”.
During the period, there was a five per cent rise in organic revenue per adviser.
In all, MAB’s revenue was up 21 per cent on last year to £116m including one per cent of “organic growth”, which was against the backdrop of a 40 per cent fall in new mortgage approvals across the wider market.
‘Outperforming’ the market
MAB said the group performed better than the wider mortgage market as its share of gross new mortgage lending increased to eight per cent in the five months to May. MAB said it continued to grow its market share due to strong leads and the quality of its AR firms.
MAB said the new mortgage approvals reported in Q2 indicated that activity had started to improve, however, it said market conditions would “toughen further” for the remainder of the year. It cited a continued rise in mortgage rates as well as a drop in home buying and moving activity but said this should recover once inflation was under control.
“It is too early to anticipate when that will happen, but when it does MAB will have increased market share and be in a very strong position to capitalise on the recovery and the inevitable catch up in house purchase transactions that will follow.
“However, we expect refinancing will continue to perform strongly,” it added.
MAB said its new AR pipelines had returned back to pre-mini Budget levels and expected this to continue throughout the second half of 2023. It said its AR firms would be able to plan better when the economic outlook became more certain, which would lead to organic growth in adviser numbers.
Peter Brodnicki (pictured), CEO of MAB, said: “We had hoped to be in a period of interest rate stability as we entered Q3, followed by a resumption in organic adviser growth in Q4. Instead, we find ourselves in an environment of continuing interest rate rises, reduced affordability, and cost of living increases, all of which are naturally impacting consumer confidence. Despite strong underlying demand for property, some buying decisions are understandably being delayed by our customers until we have a more stable economic and interest rate environment.”
He added: “Despite the additional market pressure, I am delighted with how MAB is performing and how our market share continues to grow. Remortgages and increasing numbers of product transfers currently represent around 60 per cent of our written transaction volumes. This will deliver MAB a greater number of refinancing opportunities in the medium term, with the group’s advisers performing particularly strongly in this area.”
