- UK mortgage lending is forecast to be 6 per cent higher this year, against 2019 volumes
- Growing market share meant gross mortgage completions grew in a declining market last year
The extension of the stamp duty holiday and the prospect of government-backed 95 per cent loan-to-value mortgages should drive activity higher this year, Mortgage Advice Bureau (MAB1) has said.
The Intermediary Mortgage Lenders Association expects a 16 per cent increase in gross new mortgage lending for this year to £283bn, which represents a 6 per cent increase compared to 2019 - and that bullish forecast was prior to the government’s housing-friendly Budget announcements.
Last year, the mortgage intermediary grew gross mortgage completions by 5 per cent, against a 9 per cent decline in the broader market following the second quarter lockdown.
That was thanks to a rising market share that reached 6.3 per cent, up from 5.7 per cent in 2019.
The rebound in activity during the second half of the year also meant recruitment picked-up. The average number of active advisers were up 6 per cent excluding the acquisition of First Mortgages, and 9 per cent with the business included. However, the second quarter lockdown did mean average revenue per adviser fell 5 per cent.
Analysts at Peel Hunt forecast adjusted pre-tax profits of £24.3m and EPS of 37.6p in 2021, rising to £27.9m and 42.9p, respectively, the following year. However, solid earnings expectations are reflected in a price/ earnings ratio of 28, which is considerably higher than the shares’ five-year average. Hold.
Last IC View: Hold, 720p, 29 Sep 2020
|MORTGAGE ADVICE BUREAU (MAB1)|
|ORD PRICE:||1,078p||MARKET VALUE:||£ 573m|
|TOUCH:||1,055-1,090p||12-MONTH HIGH:||1,215p||LOW: 405p|
|DIVIDEND YIELD:||2.4%||PE RATIO:||45|
|NET ASSET VALUE:||67p*||NET CASH:||£30m|
|Year to 31 Dec||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
|*Includes intangible assets of £18.3m, or 34p a share **Excludes special dividend of 5.35p per share|