FR: What have been some of your company's key milestones over the past couple of years?
2011 and 2012 saw MAB's strongest growth with the company more than doubling in size to over 500 advisers.
Profits have grown by between 30% and 40% every year in the last four years which has resulted in record profits in both years with that trend set to continue. As a result MAB is extremely financially secure and able to continue to invest heavily in our proposition to advisers and our appointed representative partners.
Our financial strength has enabled us to make some key acquisitions and investments over this period to add to those we had already made, including a joint venture with Countrywide to form Capital Private Finance to service the high net worth sector. These carefully considered acquisitions have ensured MAB not only grows strongly, but maintains a very high standard in terms of adviser and business quality and productivity.
Last year saw MAB acquire Mortgage Talk which gave us access to an extremely important sector we did not previously compete in - new build. On the back of that we launch the MAB New Build Network: the only network of its type designed to support brokers, builders and lenders in every aspect of the new build market. That purchase was followed by that of Sherwins in the fast-growing affordable housing sector, enabling MAB to compete in this area as well.
In the last couple of years the MAB brand has never been stronger, and hopefully more respected, having built a reputation around innovation and our focus on protection, as well as our high quality standards.
We have been lucky enough to have been recognised by the public and our industry colleagues, and have been very proud to have won a number of consecutive company awards - including Best Mortgage Broker, Best Protection Broker, Best Adviser - as well as winning Best Business Owner for three years running at the British Mortgage Awards.
FR: Last year was a big year for Mortgage Advice Bureau - what does 2013 hold for you?
We are very excited about the year ahead which will be our best so far. Our proposition has never been stronger, and we really do stand out from the crowd as a network built by brokers for brokers.
We've been attracting some very high calibre advisers and firms, and although we have no acquisitions planned for 2013, we've had unprecedented interest in our network proposition. Another great year of growth is expected, with a lending target of £5bn clearly in our sights.
With signs of a recovery in lending, our mortgage shop proposition has been re-kindled and one of our AR partners has just opened the first of 2013 in Swindon, with more in the pipeline.
Our focus on protection is at its prime, with new monthly protection board meetings, and the results we have been achieving have already bucked the general trends that insurers are reporting (many have seen a significant fall in protection sales in the first quarter of 2013 despite the strong mortgage activity reported by brokers).
We expect a record year of protection sales in terms of mortgage penetration as well as free standing sales, with our focus on protection supported by a further telephone advice centre supporting our AR firms in the South.
FR: What challenges do you feel are most affecting brokers in the current economic climate?
New lead sources are crucial to brokers with the remortgage market being so weak in recent years, and those business models that rely on the re-broking of protection will also struggle following the price increases introduced as a result of the EU Gender Directive.
Business quality has never been higher on the agenda of the FSA and particularly the lenders. Because of this, it is essential that brokers do not gamble with their futures to get that extra sale, and instead up their game in terms of the quality of business submissions where required in a market where everything and everybody is under close scrutiny.
FR: Has the Mortgage Advice Bureau addressed these challenges and, if so, how?
MAB has always been extremely successful in terms of lead generation support for its AR partners both in terms of existing client banks, introducers, its mortgage shop model and more recently website/social media optimisation. MAB has the leading estate agency proposition in the market working with over 850 leading businesses across the UK.
Our client bank marketing campaigns ensure additional sales and recommendations are strong, with protection sales (both mortgage and non-mortgage related) remaining the biggest growth area by far in 2013 Sales have been strong in the first quarter of 2013 against a backdrop of a very disappointing start to the year for protection sales reported by the leading insurers.
MAB's new build network is a direct response to the restricted access brokers have to this growing market, with builders largely dealing with specialist brokers only. With over 850 estate agency branches we also have access to a huge landlord database which is a major focus in terms of lead generation and advice.
Business quality has always been very high on MAB's agenda and remains so. MAB carries out all the compliance functions on behalf of its AR partners, and we are delighted at the quality of advisers that continue to join us. Increased new business checks have however been introduced this year, with the focus very much on submission quality, responding to the more detailed and constructive market information being provided by lenders.
Access to the best lenders, products and procuration fees can no longer be taken for granted by brokers, with business quality being considered equally alongside business volumes. Access, to new lenders, products and exclusives is key. Just being the biggest is no longer seen as the best, and so broker businesses and networks need to resource or fund their models sufficiently to compete in the future.
FR: What do you predict for the UK housing market in the next five years?
I have said for some time that we should expect a £150-155bn market and that now looks like a very achievable figure, with government initiatives to support the housing market now set to continue for the next two to three years at least.
Job security and the economy will restrict the rate of any recovery; however there is still a strong demand out there from first time buyers and home movers who can afford to buy (in other words, are seen as good quality or low risk in terms of borrowing), who want/ need to move, but who require a relaxation in lending criteria to do so. We are starting to see that happen. If capital adequacy restrictions can be overcome, in terms of government backed schemes, then that will open up the market to more lenders at higher LTV which is what is required.
What is hugely disappointing is the lack of government action to ensure new build numbers grow to 200,000+ required annually, as this is a key component of a sustainable recovery. We need a balance of increased activity and steady property inflation, rather than prices being driven sharply higher due to lack of supply.
UK housing transactions are likely to see a steady increase over the next five years with price inflation of 2-3% per annum (higher in areas such as London and the South East). However, if lending volumes see a sustainable increase due to relaxed criteria, property prices could spike again if demand is not met by significantly increased new build numbers.
FR: If you were in charge of the FSA for one day, what would you do?
Take the day off!
Peter Brodnicki, Chief Executive of the Mortgage Advice Bureau, has been fundamental to MAB’s growth from just 10 brokers in 2000, to 500 advisers in 2013. He’s won Best Broker Business Leader at the National Mortgage Awards for three consecutive years and is an avid Fulham FC supporter.
