The Mortgage Advice Bureau has reported flat mortgage completions in H1 2023 despite a 27 per cent reduction in gross new mortgage completions in the market as a whole.
In an analyst note, MAB reported completions of £12.1bn in the first half of 2023, a fall of just £0.1bn on the completions of £12.2bn that was recorded in the first half of 2022.
This came despite UK mortgage approvals remaining less than 20 per cent below the comparative period for 2022.
Additionally, MAB management has stated it is now taking a “more cautious” view of activity levels in H2 2023, given continuing economic uncertainties surrounding the outlook for inflation, base rates and mortgage rates.
MAB’s market share rose to 8.1 per cent for H1 2023 from 6.3 per cent for the same period in 2022.
This increase in market share has “magnified” the attractions of its network to appointed representative firms, according to the bureau.
Number of advisers
The note additionally reported that MAB's adviser numbers had recovered slightly after previously experiencing a fall of 6 per cent to 2,109 at the end of June 2023.
Since then, the number of advisers has increased to 2,114 by September 22.
MAB stated that, due to the continuing AR caution against a challenging market backdrop, it expects adviser number to remain at current levels for the rest of 2023.
It added that growth in this area could be slower in the first half of 2024 than historic rates.
Organic growth
Organic growth outperformed MAB's expectations for H1 2023, increasing its revenues by 1 per cent to £97.5bn.
MAB additionally stated that Fluent Money, a specialist lending intermediary that was acquired in July 2022, was the principal cause of the shortfall at a group level.
This reflects the fact it was resourced for a continuation of the growth surge leading into the September 2022 mini-budget.
It was additionally reported that revenue per mainstream adviser increased 17 per cent, which it stated reflects the impact of Fluent, slower adviser number growth, and higher sales of protection products.
Expense ratio
TMAB’s expense ratio rose from 15 per cent to 20 per cent as costs increased 67 per cent.
MAB stated that this reflects Fluent (and other smaller acquisitions) and investment spending, leading to a fall in the adjusted Ebitda margin from 12 per cent to 9 per cent.
MAB’s management now expects adjusted profits before tax of no less than £22mn in 2023, 19 per cent less than the current forecast, but implies a strong recovery in performance in H2 2023.
Additionally, in view of the expected slower start to 2024, MAB stated that it expects to reduce its estimates for the end of year 2024 by around 10 per cent.
tom.dunstan@ft.com
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