An Australian lender has bought buy-to-let fintech Molo, marking the entrance of another overseas investor into the UK mortgage market.
ColCap Financial, a privately-owned non-bank lender headquartered in Sydney, has bought an 80 per cent shareholding in London-based Molo, a lender which specialises in mortgages for landlords.
The two entered into partnership last year, before sealing their relationship with a share buyout.
This is not the first time a lender from Australia has moved into the UK’s specialist mortgage market.
Pepper Money, which also originated out of Sydney, has expanded into the specialist UK mortgage market. It focuses on those borrowers turned away by high street lenders.
Meanwhile Bluestone entered the UK mortgage market from Australia in 2015.
ColCap’s acquisition of Molo, which launched in 2018, will see the UK lender continue to operate under its current management team, headed up by co-founder and chief executive, Francesca Carlesi.
It will see the Australian lender attempt to make a dent into the £310bn UK mortgage market, as valued by UK Finance at the end of last year, by making use of ColCap’s deep pockets.
“This transaction marks the start of an important new chapter for Molo, allowing us to expand our reach and accelerate our growth,” said Carlesi.
“Together we will continue to innovate our products and deliver exceptional levels of customer service.”
ColCap was founded in 2006 and currently has a loan portfolio in excess of £6.9bn (AUS$12.4bn). It operates under three brands at home - Origin Mortgage Management Service for white-labelled mortgage loans, Homestar Finance for direct retail lending, Granite Home Loans for lending through brokers.
‘Sign of the times’ for specialist lending
Imran Hussain, director of Harmony Financial Services, told FTAdviser the UK mortgage market was “very much a global market of interest”.
Hussain, who is familiar with Molo, said the lender has been very active in the buy-to-let space - though he noted it did have to stop lending for a time during the pandemic.
He also noted other big financial services companies had been buying up specialist mortgage lenders in the UK, such as Barclays buying Kensington Mortgages last year.
Kensington specialises in mortgages for those with complex income - including self-employed workers and contractors.
Last year also saw specialist lender OSB Group merge its Precise Mortgages and Kent Reliance for Intermediaries’ sales forces into one team.
Hussain said these deals and mergers, alongside ColCap’s share grab, were a “sign of the time” for specialist lending.
“Things are getting tougher, so we’re seeing more smaller lenders looking to merge or secure investment,” the Nottingham-based broker explained.
Despite a dip in house prices and house transaction levels flailing, Hussain has seen activity pick up over the past month.
For him, mortgage enquiries have topped 50 over the past month, marking his busiest four weeks in the job ever.
“People are looking at all forms of property ownership - residential, shared, buy-to-let. The interest is there, but it is all about the right priced property.”
ruby.hinchliffe@ft.com
