According to Belmont Green Finance’s latest financial report, the firm said that gross new lending was “consciously limited” at £190m, which it said was due to a “clear focus on writing new mortgage business with sustainable returns rather than chasing volume in what was a very competitive marketplace”.

Within that figure, around 65% was buy to let (BTL) and 35% was residential owner-occupied loans. This is a move from 2022, when BTL loans made up 85% and residential loans consisted of 19%.

Belmont Green Finance has originated loans totalling £3.5bn to more than 17,000 mortgage customers, noting that it showed its “commitment to serving underserved markets”.

The lender added that around £500m of existing customer loans matured during the period, and with higher mortgage rates posing a “material stock” to customers, its ability to retain customers was “brought into sharp relief”.

Around 62% of maturing customers took a new deal with the firm, limiting in-year redemptions to £240m.

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The lender added that product transfer volumes came to £305m, an increase from £113m in 2022.

The company said its mortgage book had been maintained at around £1.69bn, which compares to £1.75bn in 2022.

Belmont Green Finance said that the average note funding in 2023 came to £1.4bn. This was supported by £750m through residential mortgage-backed securities (RMBS) in 2023, indicating “strong market confidence”. This is also an increase from £400m in 2022.

There was also around £200m of capital from its shareholder Pine Brook.

The firm said that its securitisation programme had reached £3.7bn issued since inception, which is a blend of RMBS, warehouse facilities and shareholder capital.

Arrears during the period, defined as balances at three months in arrears, rising to 2.2% in December 2023 compared to 1.3% in December 2021.

Belmont Green Finance said that it expected arrears to “remain within our overall risk appetite”, pointing to its “proactive arrears strategy”.

 

‘Consistent performance and effective management’

The lender also reported £2.6m in core operating profit, a fall from £11.6m in the previous year.

However, it added that it was the third consecutive year of profitability, which showed its “consistent performance and effective management”.

The company said that it was in “advanced efforts” towards obtaining a banking licence so it could diversify funding sources and improve its competitive positioning.

Vida Homeloans said in 2021 that it was working on a banking licence application to the Prudential Regulatory Authority (PRA).

Anth Mooney (pictured), Vida’s CEO, said: “Despite 2023 being a challenging year for the UK economy with significant headwinds from rising interest rates and inflation, Belmont Green has demonstrated remarkable adaptability. Our business model’s flexibility, coupled with a focus on maintaining high service standards and strengthening relationships with intermediaries, has been crucial in navigating these market dynamics.

“This approach not only contributed to our sustained profitability but also ensured substantial progress towards our long-term goal of becoming the leading challenger in the UK specialist mortgage market.”

He continued: “Specialist mortgage lenders plan an increasingly critical role in supporting borrowers overlooked by the larger lenders. We have established a successful, sustainable and responsible lending business by working hard to understand and respond to the needs of our customers.

“As a management team, we have a proven track record for reacting swiftly and decisively to meet challenges posed by a shifting environment. We enter 2024 in a confident position, with committed funding capacity in place, a maturing loan book, a strong capital base, cautious provisioning reflecting the increasing arrears position, and a well-established distribution franchise – we are therefore well-placed to execute on our plans for the year ahead.”