Mortgage Advice Bureau today released a trading update for the six months ending 30th June 2023, showing a 21% increase in group revenue to £116m (H1 2022: £96.5m), despite a 40% drop in new mortgage approvals in the market following the September 2022 mini-Budget.
While the total adviser number decreased by 6% to 2,1091 (31 December 2022: 2,254), mainstream advisers increased by 4% to 1,966, contributing to an approximately 5% increase in organic revenue per adviser.
The company acknowledged the impact of the mini-budget, which resulted in a smaller-than-expected pipeline of written mortgages and new Appointed Representative (AR) firms. The existing AR firms paused recruitment due to market instability, leading to a reduction in adviser numbers.
UK gross new mortgage lending dropped 28% for the first five months of the year compared to the same period in 2022, due to rising living costs and higher interest rates. The residential purchase segment saw the sharpest decline at 30%, while residential re-mortgaging was down 18% and buy-to-let 46%. However, product transfer lending for Q1 2023 increased by 12% compared to Q1 2022.
Despite these challenges, the company’s market share of gross new mortgage lending grew to 8% for the five months ended 31 May 2023 (H1 2022: 6.8%).
CEO Peter Brodnicki 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.
“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% of our written transaction volumes. This will deliver MAB a greater number of re-financing opportunities in the medium term, with the Group’s advisers performing particularly strongly in this area.
“Despite the signs of a market recovery being further off than we expected three months ago, business efficiency continues to increase, adviser productivity has been maintained, and all strategic initiatives continue to progress well. The Group is well positioned to deliver further growth as the market recovers.”
