Countrywide agents review financial services operation

Friday 27th July 2012

Countrywide, the UK’s largest chain of estate agents and mortgage brokers, is to undertake a cost-cutting review of its financial services division.

The chain had been planning for modest growth, but is now predicting that mortgage lending levels will be ‘even lower’ this year than last.

While a spokeswoman was keen to stress that no jobs are under scrutiny, profits in the division fell 48% in the second quarter of this year compared to Q2 last year.

In its Q2 Investor report, Countrywide says financial services turnover remained static at £15.6m, compared to the same period in 2011, but a squeeze on margins meant operating profits fell from £1.3m to £688,000.

The fall in profits was despite a very slight rise in the number of mortgages arranged in Q2 by Countrywide brokers, from 13,338 to 13,475.

But Countrywide says lending criteria have become tighter and pricing is higher than six months ago.

Countrywide financial services director Nigel Stockton said: “As the UK’s largest mortgage broker, we pride ourselves on being like any well-run business and constantly look at our cost base and matching our services to the needs of our customers in this volatile mortgage market.  

“While we expected modest lending growth in 2012 and invested in mortgage distribution in preparation for this growth, it is clear that mortgage volumes in 2012 are going to be even lower than 2011.

“Mortgage volumes continue to be under pressure from capital and liquidity constrained lender appetite, and mortgage availability is now subject to stricter application of lending criteria than six months ago. 

“As a result, we are focused on responding accordingly, and all operational overheads are being reviewed as we focus on reducing costs in line with the reduced market. 

“We expect natural turnover to allow us to achieve the appropriate level of coverage to ensure we deliver growth in our full-year results.”

Countrywide also announced that its survey and valuation business is to become the lead valuer for the Co-operative Bank, managing valuations across the Co-op, Britannia and Platform brands.