A financial service trading statement by a major player this week highlights the issues facing the industry.

LSL is one of the largest providers of services to mortgage intermediaries and franchised estate agencies and provides valuation services to many of the UK’s largest mortgage lenders.

This week it’s reported that in the first half of 2023, against the same six-month period in 2022, Purchase lending reduced by 27 per cent.

It takes some comfort by saying that this was slightly less than the overall market reduction of 30 per cent.

Remortgage lending by LSL decreased by 15 per cent, compared to the market which fell by 21 per cent.

Product Transfer business increased by 48 per cent allowing LSL to comfort its shareholders by saying that total LSL mortgage lending advice declined just four per cent over the half year.

However, it warns: “Whilst this change in the nature and volume of mortgage lending was largely included in our expectations for H1, the most recent trading following the June interest rate rise indicates that this shift has increased further and we now expect these conditions to persist in H2, with a resulting impact on margins and full year profit.”

In its outlook for the coming second half of 2023 LSL tells shareholders: “The mortgage lending market in H2 remains highly uncertain, resulting in a wider range of possible outcomes for the Group than usual. 

“We now expect that there will be lower levels of Purchase and Remortgaging activity than previously forecast for the second half of the year, with this only partly offset by increased lower margin Product Transfers. 

“…Full year Group profits will now be substantially lower than previously expected.”