LendInvest sees ‘fruits of its labour’ in H2

Posted ahead of the publication of its full-year results for the year ending 31 March, which will be in July, the specialist lender and platform provider said business picked up in the latter part of the period. 

LendInvest’s platform assets under management (AUM) rose by 7.6% year-on-year (YOY) to £2.78bn, and by 3.3% in H2 to £2.69bn. 

The firm attributed this growth to its mortgage division, saying 83% of its platform AUM was now off balance sheet. 

LendInvest said there was a noticeable rise in recovery in Q4, with a 106% quarter-on-quarter (QOQ) growth in buy-to-let (BTL) applications and a 96% surge in offers. 

This resulted in a 102.5% increase in completions from Q3 to Q4, as the lender enhanced its pricing agility, improved its operating capacity and launched its mortgages portal. 

LendInvest mortgages portal enhancement

LendInvest said its mortgages portal, which consolidates residential, BTL and short-term mortgages into one platform, drove cost efficiencies through increased automations. 

Its headcount cost run rate was reduced by a quarter, while it maintained its operating and origination capacity, the firm said. 

The portal aims to streamline the mortgage process from application to offer. LendInvest said the time it took brokers to retrieve case information had been sped up by 80%, and a full application could be submitted in fewer than five minutes.

There is also a product transfer process that allows quick product switching. 

LendInvest said the portal allowed the firm to make pricing changes three times faster and reduced its time out of the market. 

Optimised balance sheet 

LendInvest’s third-party managed funds under management increased by 14.5% annually to £4.12bn. 

The firm said it optimised its balance sheet primarily through the sale of its residual economic interest in Mortimer BTL 2023-1, a residential-backed mortgage securitisation compiled of BTL loans originated by LendInvest. 

This raised £410m. 

LendInvest said the closure of new separate account mandates at a value of £700m also helped optimise its balance sheet. 

‘Beginning to see the fruits of our labour’ 

Rod Lockhart, chief executive of LendInvest, said 2023 had been a “tale of two halves” for the firm. 

He said: “The first half was characterised by significant internal restructuring – we prioritised liquidity, balance sheet flexibility, and reducing our cost base – crucial steps towards securing the financial health of the business. In the second half of the year, we are now beginning to see the fruits of our labour. The benefits of our early-year actions are becoming apparent, and we’re experiencing a turnaround in the operating environment. 

“Throughout the year, despite the broader challenges, we’ve continued to make progress against our long-term strategic goals. Our adaptability in response to dynamic market conditions and commitment to our customers are underscored by our ongoing product innovation and the evolution of our proprietary next-gen technology.” 

Lockhart added: “The launch of the LendInvest mortgages portal marks significant progress in our roadmap, seamlessly integrating our entire mortgage suite into one unified platform. This development has transformed our operations in the mortgages division, significantly enhancing efficiency for both our customers and internal teams. 

“There are also encouraging signs in the broader market landscape, and our achievement of a record number of buy-to-let offers in February reflects the robust demand and confidence in our product offerings and service. As we move forward, our sights are firmly set on bolstering these efforts, with a clear focus on driving towards our goal of returning to profitability during full-year 2025.” 

Looking forward, LendInvest said its return to profitability was reliant on easing financial conditions, mortgage market activity and opportunities in the BTL sector.