Mortgage Advice Bureau LON:MAB1, the AIM-listed UK mortgage broker, published its results earlier this week.
One of the defining characteristics of the UK is that ‘Every Englishman’s home is his castle,’ which also applies to the Scottish, Welsh and Northern Irish, and the desire to own one’s own home has been an economic driver of working and middle-classes in Britain since the Thatcherite home ownership revolution of the 1980s.
However, compared to our neighbours in Europe, home ownership isn’t that high. The average rate of home-ownership in the EU is about 69%, compared to 65% in the UK. Notable outliers are the more advanced economies of France, Germany and Switzerland where home-ownership is significantly lower than both the EU and UK averages. This is partially due to cultural reasons, but also due to the very different nature of the property market in these countries, where good quality, relatively cheap housing stock for rent is abundant.
The housing market has always been a barometer for the health of the UK market, where it is perceived that greater levels of home-ownership and higher house prices are a sign of a healthy UK economy – which logically has its flaws.
Nevertheless, there was a fear in real estate circles that house prices were stagnating post-Covid, which sent waves of consternation though Britain’s home-owning middle classes. This was accompanied by a lower rate of mortgage approvals.
That said, if we look at recent history, this has seemed to be a storm in a teacup. Over the past year the UK property market has been marked by rising house prices, up 4.6% to 4.7% year-on-year, bringing the average UK property price to £268,000, with CBRE, the real estate investment firm predicting a 15% increase in investment in 2025.
Mortgage approval rates up 31%
Mortgages have also roared back in the last year, with mortgage approvals hitting 755,000 in 2024, up 30.8% y-o-y, with the positive trend expected to continue in 2025, with forecasts suggesting a 13.4% rise in mortgage approvals, potentially bringing the annual total to the highest level since 2021.
At the centre of this is Mortgage Advice Bureau which reported strong 2024 financial results, driven by growth in completions and adviser network expansion. The Derby-based mortgage broker posted strong results for the year to end-December, with revenue climbing 11.3% to £266.5m, buoyed by higher mortgage completions and the continued growth of its adviser network.
The AIM-listed company reported a 16.7% rise in gross profit to £81.9m, alongside a 1.4 percentage point improvement in gross margin, reaching 30.7%. Adjusted profit before tax surged 38% to £32m, while statutory pre-tax profit saw an even larger increase of 41.5%, reaching £22.9m. The company also improved its adjusted profit before tax margin by 2.3 percentage points to 12%.
Adjusted diluted earnings per share grew by 32.4% to 39.2p, while basic earnings per share rose 17% to 27.6p. Adjusted cash conversion remained robust at 120%.
Gross mortgage completions, including product transfers, increased by 3.9% to £26.1bn, with the company’s share of new mortgage lending rising slightly to 8.4%, from 8.3% the previous year.
The number of mainstream advisers grew 1.2%, reaching 1,941 by year-end, and rose further to 1,985 by mid-March. Revenue per mainstream adviser rose by 12.3%, to £138,700.
The board has proposed a final dividend of 14.8p per share, a slight increase from the prior year. Mortgage Advice Bureau also ended the year with net debt of £9.7m, maintaining a low leverage ratio of 0.3x.
Mortgage Advice Bureau sees strong outperformance
Founder and CEO Peter Brodnicki said in a statement to the market: “MAB delivered strong financial growth in 2024, reinforcing our consistent track record of outperformance and market share expansion, even in challenging market conditions.”
He added that increased investment in technology and digital marketing was key to supporting sustainable growth and future-proofing the company’s operations. “Adapting our business model to align with evolving customer preferences for research, advice, and seamless transactions will ensure that our advisers can reach more potential clients while retaining existing ones,” Brodnicki said.
Looking ahead, Brodnicki stated that 2025 had started strongly and in line with expectations. He noted that many Appointed Representative firms were anticipating growth in adviser numbers while focusing on increasing profitability through greater productivity.
“We also see opportunities to scale our invested businesses, build on impressive adviser productivity, and continue to deliver strong, sustainable returns for our shareholders in the long term.”
Shares opened the week (17th March) at 765.48p, down 4% over one-year, but up 18.7% year-to-date. The company had a market cap of £441m.
Continued vitality of the UK property market
Mortgage Advice Bureau’s strong performance in 2024 highlights the continued vitality of the UK property market, with mortgage approvals and house prices on the rise despite early concerns of stagnation. The company’s consistent growth, bolstered by its strategic investments in technology and marketing, positions it well for future success.
Looking ahead, Mortgage Advice Bureau remains optimistic about its ability to scale its operations and deliver sustainable returns, as it adapts to evolving market conditions and customer demands. With a strong start to 2025, Mortgage Advice Bureau is poised to build on its solid foundation and maintain its track record of outperformance and now might be the moment to pick up a few shares for your portfolio.