Connells finalises Countrywide takeover
Countrywide will continue to trade under its existing brands and operate as normal. The surveying and asset management businesses will operate as separate entities to ensure competition and choice in their respective sectors.
Connells will invest into Countrywide’s technology and focus on growing the business.
The acquisition sees Countrywide relieved of £91.9m in debt and avoiding administration. All of its lenders will be repaid this quarter.
The deal was accepted in January by 51 per cent of Countrywide’s shareholders at a value of £130m.
The group will be headed by chief executive David Livesey and management from both companies will oversee the daily operations of Countrywide and the integration of the businesses.
Paul Creffield, group managing director of Countrywide will transition to a part-time role ahead of his retirement.
Livesey said: “Our companies have a long, shared history, competing healthily on the high street and in the industry, and sharing many of the same attributes – a clear strategy to be market leader, to move the property industry forward and to keep our customers and clients at the heart of our activities.
“We look forward to welcoming all our new colleagues into Connells Group, working together on our exciting future and turning Countrywide around for our shared success.”
LSL buys Mortgage Gym for £2.4m targeting new build expansion
The move follows the purchase of a 60 per cent stake in Direct Life and Pensions earlier this year, which the group has now revealed cost £1.8m.
The property services group, which includes mortgage club TMA and network Primis, said the purchases were part of its digital strategy to drive growth in its financial services division.
LSL completed the purchase of Mortgage Gym from the administrator by offsetting its position as a secured creditor – it first invested in the business in 2018.
Mortgage Gym launched as an online adviser and developed a digital platform that confirms mortgage eligibility within 60 seconds, matching borrowers with lenders.
However, it recorded a pre-tax loss of £3.9m for the year ended 31 December 2019, at which date it had gross assets of £1.5m.
“The reported losses in 2020 are expected to be considerably lower and we expect the Mortgage Gym technology to contribute positively to group profitability once it is fully deployed,” LSL said.
New build rollout
LSL has been using the Mortgage Gym software in the new build market and said the purchase would allow it to rollout the service quicker and to improve the service proposition to developers, giving the opportunity to grow market share in this sector.
“It will also bring significant benefits to Embrace Financial Services, increasing the efficiency and productivity of advisers working with LSL and third-party estate agency offices,” LSL added.
LSL group chief executive officer David Stewart said: “These important acquisitions will help LSL drive further growth in financial services, which is at the heart of our strategy.
“They provide us with market-leading digital capability, and I am delighted that we have been able to complete these deals.”
Mortgage Advice Bureau buys majority stake in First Mortgage Direct
The deal values First Mortgage Direct at £20.6m and brings together two firms with completions worth over £16bn of mortgage lending in 2018.
First Mortgage will join the MAB group but retain its own brand with Ian McGrail remaining as managing director.
The firm has a strong presence across Scotland where the business was established over two decades ago, with 90 employed advisers across its Edinburgh head office, 14 mortgage shops and telephone advice centre, and offers a multi-channel approach to providing advice.
In a statement announcing the deal, MAB said: “This is an area that both MAB and First Mortgage will develop further together, leveraging the expertise and scale in both businesses in order to also accelerate respective ambitious growth plans.”
First Mortgage operates a no-fee model and has developed strong lead generation, acquiring more than half its new customers via referrals from existing customers along with “outstanding repeat business levels”, the statement added.
Like MAB, the firm also focuses on customer protection needs and approximately half of its revenues are derived from protection products.
“First Mortgage is one of the very strongest and most forward-thinking businesses in the UK mortgage intermediary market, with customers’ current and future needs both integral to its strategy,” the MAB statement continued.
“First Mortgage is highly regarded in the new homes market in Scotland, making it complementary to MAB which also holds a significant presence in this sector more widely across the UK,” it added.
The move will enable MAB to further grow its adviser numbers and market share and is expected to provide significant further growth opportunities for both firms.
First Mortgage’s omni-channel approach, and particularly its telephony strategy, will be leveraged further through the planned roll out of MAB’s evolving technology.
In 2018, First Mortgage arranged around £2bn in mortgage lending and in the nine months ended 31 December 2018 it achieved revenue of £10.2m and profit before tax of £1.5m.
Mortgage Advice Bureau managing director Ben Thompson (pictured) told Mortgage Solutions that it was an ideal fit for the two businesses.
“First Mortgage has a strong brand with high customer satisfaction and has a very high-quality risk and compliance side,” he said.
“It’s a scalable business that complements what we do in our group, along with being strong in protection advice, so it is very much the ideal fit for both firms.
“We have joint growth plans and we’re in it for the long term.
“First Mortgage will become part of the MAB group but it’s a big business that’s directly authorised and will retain its own brand,” he added.
First Mortgage is jointly owned by father and son Robert and Ian McGrail.
Robert McGrail, a director, is selling his full stake, while managing director Ian McGrail will retain 20 per cent of the business, with an option being agreed for MAB to complete the full purchase between 2024 and 2030 at a value of up to £10m.
Ian McGrail said: “I’m really pleased to be partnering with MAB. Our plans at First Mortgage are full of ambition with clear objectives that we are very much focused on achieving.
“With MAB I feel strongly that we have picked the best strategic partner to enable us to not only protect what we have built so far, but also help us achieve our big ambitions over the coming years.”
Mortgage Brain buys Criteria Hub
Mortgage Brain has already started planning the integration of Criteria Hub into its point-of-sale, CRM and compliance system, The Key.
It said it would consult about how best to complete the integration, but it is likely to involve results from Criteria Hub searches feeding into the Mortgage Brain sourcing system.
“We look at it complimenting what we are already doing,” Mortgage Brain CEO Mark Lofthouse (pictured) told Mortgage Solutions.
“Brokers are telling us that they want to understand lenders that will lend on something and then start looking for products from there, so the results from Criteria Hub will feed into the other systems.
“We don’t have a timescale yet on when this will go live but we will consult with our partners on what they would like it to look like and then start on developing.
“It is a high priority for us,” he added.
Criteria Hub will remain available to any adviser in the market as a standalone system or it can be bought as part of a package.
The criteria-based sourcing system has already agreed deals with Countrywide and Openwork for their advisers to access the platform.
‘Excellent strategic fit’
Lofthouse added that over the last four years Criteria Hub had impressed many people within the mortgage industry, including the Mortgage Brain team, and noted that it was “an excellent strategic fit with our business”.
“The acquisition of Criteria Hub demonstrates the next phase in our strategy to strengthen and extend our range of technology solutions and services for the benefit of all our customers,” he continued.
Criteria Hub co-founder Jason Hegarty said: “We’ve always had a very clear vision of how the Criteria Hub platform will grow and evolve around our users and with Mortgage Brain we’ve found a partner that shares our core values and vision.
“Together we are set for a very exciting few years ahead.”
Mortgage Brain is the parent company of AE3Media which publishes Mortgage Solutions.
Legal and General signs deal to help target property start-ups
The insurer told Mortgage Solutions it will use the insight to drive digital innovation and transformation across the business and help decide which property firms to invest in.
GrowthEnabler was founded in 2015 by Aftab Malhotra and Rajeev Banduni and aims to identify the most innovative and valuable start-ups and digital solutions for large corporates to engage with.
This can be through acquisition, joint venture or other forms of commercial partnership.
Build on technology investments
Legal & General said it would gain access to more than 500,000 start-ups and digital solutions across the world rated by five criteria.
L&G group digital strategy and innovation director Martijn Moerbeek said the business was looking to build on its previous investment in start-up technology businesses.
“Legal & General has a strong track record of supporting, investing in and accelerating the progress of fast-growth start-ups – from CareSourcer to Buddies to SalaryFinance,” he said.
“Our philosophy of patient capital and partnering for the long-term is perfectly suited to the start-up environment, where businesses need to know that their funding and commercial partners are stable and available.”
The GrowthEnabler platform will use machine-learning and search algorithms to identify relevant digital start-ups for Legal & General to invest in.
L&G said that as part of the partnership it will also be actively supporting GrowthEnabler in its mission to give global start-ups a more visible platform through greater exposure to corporate leaders.
GrowthEnabler co-founder Malhotra added that the firm was pleased to be part of L&G’s digital transformation.
“Our Artificial Intelligence (AI) technology, scoring algorithms and team collaboration tools will enable Legal & General to quickly discover new digital start-ups and solutions relevant to their business priorities and challenges,” he said.
Legal and General buys Manchester build to rent tower
The acquisition brings Legal and General’s development pipeline in Manchester to over 750 units, which it said is underpinned by a significant demand for rental accommodation.
The acquisition has been made through LGIM Real Assets’ open-ended build to rent fund.
The West Tower will be the tallest BTR scheme in the UK.
Slate Yard development in Salford
Deansgate Square is Legal and General’s second BTR scheme in Greater Manchester and follows its Slate Yard development in Salford, which was 50% let before first occupation.
The third and final phase of The Slate Yard is due to start construction shortly.
Both developments will create a community for residents who will benefit from free WIFI, a residents lounge and gym. Deansgate also offers access to other premier facilities such as a tennis court and swimming pool.
Housing needs remain under-served
Whilst Manchester has seen increased investment over recent years, the city’s housing needs remain under-served, LGIM said.
According to Experian, the population of Greater Manchester is expected to grow by 14% over the next 20 years with 3,465 rental households forming every year.
Despite an estimated 12,000 new homes required each year to meet demand, annual delivery since 2010 has averaged just 650 homes.
Dan Batterton, BTR fund manager at LGIM Real Assets, said: “As demand for rental accommodation continues to outweigh supply, Legal & General is increasing the scale of its Build to Rent portfolio, UK wide.
“The acquisition of Deansgate and our award-winning Slate Yard development are excellent examples of Legal and General investing in long term sustainable schemes. We are supporting wider urban regeneration through utilising existing local infrastructure and maximising land density in areas where there is a housing shortage.
“Manchester is the second most populated area in the UK with a particularly diverse economy. The apartment sizes, amenities, specification and affordability across our multiple schemes will allow us to cater for a wide demographic across this varied community.”
Richard Leese, leader of Manchester City Council, said: “By providing hundreds of homes for market rental this development will make a significant contribution to the council’s residential growth strategy for homes across a range of types and tenures to meet demand in our vibrant and fast-growing city. Legal and General are already a significant player in Manchester and we welcome their investment in Deansgate Square.”
DPR Group acquires digital broker Burrow
DPR technology now owns a core banking platform for origination and servicing that is used by over 40 UK mortgage lenders and the eKeeper broker CRM system with nearly 3,000 users across the country.
The firm said its acquisition of Burrow took it a step closer to providing a suite of fully integrated digital applications for customers, lenders and brokers.
This includes application capture and processing with affordability assessments and eligibility checks; integration with Open Banking to assess income verification and household expenditure; and end-to-end process automation and workflow for lenders and brokers.
Earlier this year, Burrow had decided to veer away from its consumer facing model, instead choosing to provide its products to the market as a broker offering.
Dave Patel, CEO of DPR Group, said: “We look forward to bringing our strengths together to enable lenders and brokers to offer customers a frictionless end-to-end digital mortgage journey. I am delighted to say that Burrow’s founder, Pradeep Raman, has joined DPR as director of digital solutions.”
Pradeep Raman, founder of Burrow, (pictured) added: “We started Burrow with the aim of making mortgages transparent and convenient for digital natives – the next generation of mortgage customers. We are excited to be joining DPR, a leader in mortgage technology.
“Together, we believe we can build a fresh architecture for the mortgage market to deliver ease, speed and cost savings to customers, lenders and brokers.”
Paragon in Titlestone takeover talks
In an announcement to its shareholders, Paragon acknowledged press speculation about a possible purchase of the development finance lender, and highlighted that “the purchase of loan books and bolt-on businesses represents a core part of Paragon’s growth and diversification strategy”.
However, Paragon emphasised that there was a long way to go before any deal was done, stating that it was in the “early stages of considering a possible acquisition” of Titlestone.
Its statement concludes: “There is no certainty of an agreement being reached nor as to the terms of such agreement. A further update will be provided as appropriate.”
Paragon purchased specialist broker Iceberg back in December, for an initial £5.2m, with a further £13m to be paid over the next five years if certain conditions are met.
Paragon is due to announce its half year results on 24 May. In its first quarter results, the firm revealed buy-to-let lending was up by 65% year-on-year to £469.8m.
Corelogic acquires surveyor eTech Solutions
Based in Solihull, eTech focuses on the residential lending and surveying sector, as well as the energy assessment market.
It was founded in 2005 by brothers Jim and David Driver and now has 140 employees.
The company provides an end-to-end property valuation workflow management platform, and a mobile valuation solution through which more than half of UK property valuations are delivered.
The firm said that leading residential valuation firms and lenders are already among its clients.
More lenders are expected to be operational on eTech’s platform within six to eight weeks, Mortgage Solutions understands.
Moreover, eTech supplies automated collection, analysis and provisions of data and reports through mobile and desktop solutions to support UK energy suppliers in the delivery of governmental carbon reduction obligations.
Commenting on the acquisition, Jim Driver, managing director of eTech, said: “We very much look forward to aligning our expertise with the considerable resources of Corelogic to further develop the services we offer to our partners in the UK and internationally.
“With new products already in the pipeline, this is an exciting phase for eTech’s continued growth,” he added.
Frank Martell, Corelogic president and chief executive officer, added: “The acquisition of eTech expands our UK footprint and augments our valuation solutions offerings.
“The eTech team has established a great track record of building innovative solutions that helped transform the UK valuation and energy assessment industries,” he continued.
“We believe that over time, we can potentially leverage benefits from a number of eTech’s innovative solutions to fuel automation and reduce cycle times in our U.S. property valuation operations,” said Martell.
Brook Financial Services bought by Belvoir
The Barnsley-based brokerage is an appointed representative of Mortgage Advice Bureau and was founded by Michelle Brook in 2010.
In a statement to investors, Belvoir Group said the acquisition would allow the group to achieve “materially greater penetration of Belvoir’s client base and increase the financial services fees generated on property sales across all group networks”.
It states: “As the group’s lettings-based networks Belvoir, Northwood and Goodchilds grow their property sales business, Brook will enable our brands to increase further their revenue from estate agency related services and mitigate some of the impact of the upcoming ban on tenant fees. Additionally, Brook will be able to make immediate inroads into the group’s main estate agency network, Newton Fallowell, by increasing the available number of mortgage advisers to service their substantial house sales transactions”.
Michelle Brook, managing director of Brook Financial Services, said: “The acquisition today of Brook by Belvoir represents a significant milestone for the business and provides the opportunity to grow sales of financial service products within the Belvoir group. Brook has a fantastic team of experienced advisers and a solid support structure operating within the Mortgage Advice Bureau network from which the Belvoir Group will benefit.”
Brook will continue working full time as the managing director of the brokerage. Meanwhile Mike Goddard will step down as chief executive of Belvoir Group and will take on the role of chairman instead. Dorian Gonsalves, currently chief operating officer, has been appointed chief executive.