There are signs of growth and consolidation in the lettings industry as letting agency franchise operation, Leaders, buys out a 500 plus property portfolio agency, and Belvoir Lettings acquires Brook Financial Services Ltd, which trades as the Mortgage Advice Bureau.
At a time of uncertainty, as we enter the Brexit negotiations, and with a weakened minority government, plus the threat around the corner to agents from a tenant fee ban, just announced in the Queen’s Speech, doom and gloom would seem inevitable. But there are signs that things are not all bad – agents are actually benefitting from the increased regulation of lettings, and buy-to-let investment is strong.
According to the latest National Landlords Association (NLA) survey 61% of landlords said they are now using a letting agent to manage their properties, up 7% in the last quarter. That’s despite many predicting that more landlords would take on their own property management task to save money, following the increase in landlord taxes. The number of self-managing landlords in the survey has actually declined from 46% in 2014 to 39% today.
At the same time, Paragon Mortgages report that following the distortion of the market last year, with the introduction of the new Stamp Duty (SDLT) surcharge on additional property purchases, BTL mortgage lending increased by 65% (October 16 to March 17), and the figure is even higher for larger portfolio landlords, with around one-quarter of the borrowers now operating through a corporate structure – a private limited company.
Leaders closed the deal on the 500-plus property portfolio of a Derby-based lettings firm, MBM Management Limited. The MBM company was started in 1996 by Malcolm Blount, and his daughter Helen Hufton joined in 2000. The business is to continue to be run by Helen Hufton under the Leaders brand.
Leaders Romans Group director, Matthew Light, had said:
“This acquisition represents continued growth for us in Derby where we have gone from strength to strength since acquiring multi-branch IMS Lettings just over two years ago. The business will be absorbed into our existing Derby offices and we have substantially expanded the premises of our property management hub to accommodate the increase in properties as well as future growth”
Belvoir’s £2m entry into the financial services sector, with its acquisition of Brook Financial Services Ltd, trading as the Mortgage Advice Bureau, is a move which ‘aims to mitigate effect of fees ban’, a reference to the proposed ban on letting fees charged to tenants.
Founder director and sole owner of Brook Financial Services, Michelle Brook, is to remain as full- time MD of her Barnsley based business, which has 32 staff and a network of advisers.
Mike Goddard the Belvoir franchise agency executive chairman, who founded the 300 plus agency in 1995, is handing over the CEO post to Dorian Gonsalves but will remain as chairman. Gonsalves, has been with the company since 2005 and more recently serving as chief operating officer (COO).
Mr Gonsales had said:
“The acquisition of Brook Financial Services, which trades as the Mortgage Advice Bureau, is a very exciting strategic development for Belvoir, and will enable our franchisees to further grow their businesses by offering a range of financial services to clients, which will in turn help to mitigate some of the impact of the upcoming ban on tenant fees.
“I am very much looking forward to my new role as Chief Executive Officer. This will enable me to see the Group through a period of growth, and implement further new initiatives, which we already have in the pipeline. Brook Financial Services has already successfully provided mortgage services to our Newton Fallowell network and we intend for similar products and services to be rolled out across the whole network”.