Your Move and Reeds Rains group LSL has reported a rocky few months for the business following its decision to franchise out all of its branches.

The group, which is now really a business-to-business operation providing services to its franchisees including mortgages and other financial products, says the recent mortgage market mayhem has impacted its revenues.

While the Bank of England talks of ‘mortgage difficulties’, the reality on the ground is that LSL says that against the same six-month period in 2022, its home purchase lending reduced by 27%, slightly less than the overall market reduction of 30%.

Remortgage lending decreased by 15% compared to the market which fell by 21%.”

LSL says it weathered this storm during the first six months of its financial year but “had expected some of these changes to moderate during the second half, with improved consumer sentiment and more stable lending condition”, it trading statement this morning says.

“However, the larger than expected increase in the Bank of England base rate announced in June has had a material impact on the mortgage market, reducing the level of purchase and remortgage activity and increasing further the proportion of product transfer business – where customers stay with their existing lender on completion of their mortgage scheme.”

Impact

LSL says its underlying operating profits was broadly in line with its expectations in the first half, the recent change in mortgage market conditions will significantly impact second half group profits which are now expected to be lower than our previous expectations.

David Stewart, Group CEO, says: “LSL made a lot of progress over the past six months, delivering important strategic projects.
“Market conditions have been challenging, and more recently have become more difficult, impacting this year’s financial performance.

“The more challenging market conditions in the short-term will not prevent us from continuing to take the required steps to deliver on the identified opportunities for future growth.”