LSL’s financial performance for 2021 was also of interest to readers.

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Base rate increased to 0.75 per cent

LSL’s 2021 profits surge to £69.9m as mortgage business grows

Nationwide raises Helping Hand minimum income and increases rates

Industry leaders urge borrowers to act quickly after BoE base rate hike

Skipton BS allows borrowers to join Homes for Ukraine scheme and pledges support

The lowdown on alternative home ownership options – an explainer

End to doubling ground rent terms for thousands of leaseholders

‘It’s better to work 80 per cent of the week with 100 per cent efficiency’ – Marketwatch

Bill to clean up ‘dirty money’ in UK property receives royal assent

Readers were also interested in news that a solicitor jailed for falsifying forms and stealing £320,00 in stamp duty. There were also discussions about fixed penalty equity release and criteria changes for EU citizens.

Lender’s product changes also proved popular, with HSBC bringing out it lowest ever fixed rate of 0.94 per cent as well as rate cuts at Halifax and Skipton.

Stamp duty fraudster jailed after stealing £380,000

HSBC launches its lowest ever fixed rate

Halifax and Skipton cut rates across ranges

Precise Mortgages reintroduces high LTV products and adverse credit criteria

Criteria changes for EU citizens have disadvantaged other foreign nationals – Marketwatch

LSL hires L&G Mortgage Club’s Hall as new home financial services director

Skipton appoints Harrison head of mortgages with sights set on top 10 lender ranking

More than a third of borrowers believe they can’t get a mortgage if self-employed

House prices drop for first time since January – Halifax

Halifax updates contractor policy to align with IR35 rules

ONP Group is a UK private equity firm that consists of O’Neill Patient Solicitors, Cavendish Legal Group, Grindeys Conveyancing and Conveyancing Alliance.

LSL said the capital from the sale will used to accelerate the group’s growth strategy which has a big focus on financial services.

In a notice to the London Stock Exchange, LSL said the sale followed “significant progress developing and executing a clear financial services led growth strategy”.

LMS chief executive Nick Chadbourne (pictured) said: “This investment from ONP Group represents a real vote of confidence in our ambitions to continue to lead and advance the market as an independent provider of conveyancing panel management services.

“ONP Group share our belief that technological innovation will provide the means to speed up and simplify conveyancing, and today’s news provides a real validation for the LMS team’s hard work and dedication to evolving this business in recent years.

“In buying LSL’s 50 per cent stake in LMS, we have a new dynamic to the shareholder mix with exciting times ahead. The whole team are looking forward to working with our new 50/50 joint venture partner alongside long-time shareholder, Connells Group.”

Focus on financial services

In April, Simon Embley announced he would step down as chairman to become the chief executive of a new mortgage advice firm Pivotal Growth, the result of a £200m joint venture between LSL and investors Pollen Street Capital.

At the time of the announcement, LSL said this investment in Pivotal Growth would enable the brokerage to acquire other mortgage firms which will be expected to join the Primis network, also part of the LSL group.

LSL has committed up to £33.5m and Pollen Street Capital up to £62.4m to support acquisitions. This will be supplemented by external debt finance in Pivotal Growth, with a view to an exit over three to six years.

LSL and Pollen Street Capital’s investments of £19.1m each will give them a 47.8 per cent equity share of Pivotal Growth.

The new advice firm has been established as part of a £200m joint venture between LSL and investors Pollen Street Capital. 

LSL owns companies in property financial services, surveying and estate agency, including mortgage network Primis, e.surv and Your Move.

The investment in debt and equity will enable Pivotal Growth to acquire other mortgage firms.

Pivotal Growth has entered a long-term arrangement with Primis, and firms acquired in future will be expected to join the network.

LSL has committed up to £33.5m and Pollen Street Capital up to £62.4m to support acquisitions. This will be supplemented by external debt finance in Pivotal Growth, with a view to an exit over three to six years. 

LSL and Pollen Street Capital’s investments of £19.1m each will give them a 47.8 per cent equity share of Pivotal Growth.

The additional investment of £14.4m from LSL and £43.3m from Pollen Street Capital will be delivered by way of loan notes.  

Embley has won permission from the LSL board to invest £4m into Pivotal Growth for a 4.4 per cent share. He departs as non-executive chairman on 28 April, but will remain on the board as a non-executive director. 

Jane Cross, previously chief risk officer of Primis and managing director of E.surv, has been appointed chief operating officer.  

David Copland, previously director of mortgage services at LSL, will become strategy and business development director. 

LSL chief executive David Stewart, and Ian Gascoigne, partner at Pollen Street Capital, will become directors of Pivotal Growth. 

Stewart said: “The launch of Pivotal Growth marks a significant milestone in the implementation of the group’s strategy. It follows other significant steps we have taken to strengthen our management team, and recent acquisitions of Mortgage Gym and Direct Life & Pension Services. 

“The Pivotal Growth joint venture with Pollen Street Capital will enable us to establish a leading position in the provision of direct-to-consumer advice and underpins the position of our Primis network. 

“I look forward to describing our plans further when we release our preliminary results on 28 April.” 

Gascoigne added: “We are highly enthusiastic to support Simon Embley and his team in the launch of Pivotal Growth.  

“We believe that Pivotal Growth has potential to quickly become a market leader, while delivering pioneering levels of innovation and the highest standards of customer service in the industry.” 

In a snapshot offering insight into the cases its Appointed Representatives (ARs) are finding hard to place, the network said its desk resolved 2,462 inbound calls; a record last month.

Between March and December 2020, the desk supported brokers with 18,746 queries in total, while throughout 2020, it resolved 23,777 queries from advisers.

The calls clearly focused on the fallout of the Coronavirus crisis as advisers also battle to beat pressure from the stamp duty land tax (SDLT) holiday deadline which ends on 31 March. The network confirmed cases involving second or holiday homes with a view to completion before the SDLT deadline were another popular enquiry.

Primis has also seen Right to Buy enquiries and income protection involving multiple and complex medical conditions in addition to complex income types.

The network said its product desk aims to address queries from advisers within four hours and is currently operating an email and call back-only service on all product sectors while Covid-19 restrictions remain in place.

Vikki Jefferies (pictured), proposition director at Primis, said: “January marked a strong start to the year for our product desk team, with a record number of queries from brokers coming in as this community looked for additional support to help them with client cases. Investing in our adviser members has continued to be a priority for us during the Covid-19 pandemic.”

On furloughed borrowers, Jefferies said lender appetite for these borrowers completely varies across the market.

“Lenders remain cautious about what will happen to sectors such as hospitality and retail from April onwards. Their main aim is to see what will happen to the market once government support schemes such as furlough end.”

She added that specialist lenders have a much better understanding of schemes like the Self-Employment Income Support Scheme (SEISS).

“Compared to where we were in the early autumn, we are seeing more considered decisions from underwriters at specialist lenders when assessing self-employed borrowers. However, the most recent development has been that many specialist lenders are unable to support borrowers who have taken an SEISS grant as recently as January.”

On the day the scheme was due to end, the government announced plans to extend the furlough scheme through to April this year, with an estimated 9.9m people registered in December and claiming 80 per cent of their income up to the cap of £2,500. The government has so far spent £46.5bn to December 2020 on furloughing workers in a bid to protect jobs.

According to Office of National Statistic (ONS) figures, UK unemployment figures were at five per cent to November-end, but are projected to rise to 7.5 per cent or 2.6m by mid-2021. The Bank of England estimates unemployment could rise to 10 per cent this year.

With hotels, restaurants, shops and entertainment industries the worst hit so far during the pandemic, 395,000 people were made redundant in the three months to November.

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.”

LSL, which includes TMA mortgage club and Primis network, did not release the value of its investment, but confirmed it would be taking seats on the DLP board.

“LSL will be represented on the board going forward, as is usual with any such investment. There is no change to the day-to-day management of the business though,” a spokeswoman said.

And the firm pledged that the move would not mean it would begin restricting distribution to other networks or clubs.

“Absolutely not, business at Direct Life will continue as normal following the investment,” the spokeswoman continued.

“Over the coming years, Direct Life will continue to focus on increasing the number of partners it works with to provide more opportunities for brokers to grow their protection business and drive further innovation in this market.”

Speed-up development

Announcing the investment, the firms said it cash would enable Direct Life to improve its technology and operational capabilities and provide further growth opportunities for its intermediary partners.

LSL group financial services director Jon Round (pictured) said the announcement “allows us to enhance our digital services in the protection arena and bring a market-leading specialist on board to further support our adviser partners in this area.

“We look forward to leveraging our combined strengths and building a partnership with Direct Life over the coming years that will allow us to drive further innovation across the protection market for the benefit of both brokers and end-customers.”

Direct Life chief executive Rob Quayle added: “Partnering with LSL is an exciting step for us as we look to strengthen our proposition and capitalise on wider market opportunities.

“The collaboration will quicken the development of our range of services, drive efficiency across our operational processes, and expand our distribution channels.

“As we embark on the next chapter of growth for the business with the support of LSL, we are confident that this will allow us to further enhance our relationships with our partners, both now and in the future, and deliver protection solutions for more consumers.”

In February, the two estate agents confirmed they were in talks regarding a merger which would include LSL’s financial service brands network Primis and club The Mortgage Alliance (TMA). At the time, it was said there was no certainty that an offer would be made. 

In an update released today, LSL confirmed it did not intend to make an offer for the property group. 

Countrywide said it had been seeing the benefits of its turnaround plan with “continuing operations having returned to growth in profitability”.  

It also said it had seen positive public sentiment in the early part of 2020, reflected in strong agreed sales ahead of company expectations. 

The board said it remained confident in the strength of the business as an independent company. 

LSH deal collapse 

This news comes just days after Countrywide’s attempts to sell its commercial real estate subsidiary Lambert Smith Hampton (LSH) also fell through. 

In November, the firm was sold to John Bengt Moeller, chairman of American real estate company Great Global Holdings, in a £38m deal which was subject to shareholder approval. 

The sale was approved on 20 January, however, Moeller failed to complete the transaction by the 11 March deadline despite Countrywide stating it had made several efforts and revisions to the timetable to get it done. 

Countrywide is continuing to engage with Moeller to complete the deal and is also looking at alternative options for the sale of LSH. The firm is also considering seeking damages and costs for the delays caused by Moeller. 

It said it was in discussions with another potential seller who expressed interest in the real estate business during the delays. 

Countrywide said it would update shareholders in due course. 

The mortgages were completed through Primis Mortgage Network, Embrace Financial Services, LSL’s owned estate agency financial services arm, and mortgage club TMA.

LSL’s market share of mortgage completions is estimated to be 8.5 per cent, increasing slightly from eight per cent the previous year.

Broken down, mortgages completed through the firm’s directly authorised mortgage club TMA rose by 14.7 per cent from £8bn in 2018 to £9.2bn in 2019.

Mortgage lending completed through network Primis increased by 13 per cent from £17.5bn in 2018 to nearly £20bn in 2019.

The network also grew protection completions by 17 per cent.

The number of appointed representative firms belonging to Primis Mortgage Network increased from 841 to 878 year on year while adviser numbers rose from 2,321 to 2,392.

Toni Smith, chief operating officer, Primis, said: “Increasing market share is key to our overall plan, likewise, the delivery of appropriate customer outcomes is also a critical measure of our success.

“We are therefore delighted that our independently measured, customer feedback on the service delivered by our advisers reached a new high in 2019. This coupled with the growth in our business, in a flat market last year, provides a strong platform for further success in 2020.”

The two estate agent groups confirmed ongoing talks in statements to the stock exchange this morning.

LSL’s financial services brands also include the network Primis and club The Mortgage Alliance (TMA).

A deal raises the prospect of significant job cuts if it were to go ahead.

However, both companies stressed: “At this stage, there can be no certainty that any offer will ultimately be made for Countrywide.”

And added that “a further announcement will be made when appropriate”.

Countrywide is one of Britain’s biggest estate agencies but has struggled in recent years with debts and a tough trading environment.

It described 2018 as a “year of reset”, after a loss after tax of £218.2m despite it being a record year for mortgage business.

Countrywide was also fined twice during 2019 for money handling issues.

HMRC fined it £215,000 for failing to adhere to money laundering regulations, while the Royal Institution of Chartered Surveyors fined it £100,000 for mishandling £10m of client money.

Countrywide also agreed the sale of its Lambert Smith Hampton brand for £38m in November.

However it this has yet to be completed as the prospective buyer John Bengt Moeller has been unable to provide the cash for the deal.

LSL last year closed 124 estate agent branches of its Your Move and Reed Rains brands.

The group also owns Marsh & Parsons and LSLi Estate Agency.