The Interview
Bigger and better
The mortgage industry was traditionally a bastion of diversity but rising regulation and restricted funding have colluded to reduce the number of players drastically. Sarah Davidson and Yuan Phoon find out why bigger is better and what the future holds for Countrywide, Mortgage Intelligence and Next Intelligence
If credit and then crunch were the watchwords of the first decade of this century, then consolidation is the watchword for the second. In the past year across the mortgage industry businesses have merged, been sold outright, sold partially, rescued from the brink of failure or bought out of administration for as little as £1. Mortgage distribution particularly has
gone from a sea of diverse businesses to a game where biggest is seemingly best. A sticky housing market and restricted lending volumes have squeezed margins for distributors and forced many to consider banding together in order to keep their businesses commercially viable. The Financial Services Authority too seems keen on a market with fewer larger players: something that would incidentally make supervision easier.
44 mortgage introducer JUNE 2011
But it would be misleading to suggest that national broker and estate agent Countrywide bought Bournemouth- based network Mortgage Intelligence and associated club, Next Intelligence, out of financial necessity in April this year. MI managing director Sally Laker and Countrywide’s financial services director, Nigel Stockton, say with conviction that the deal (for an undisclosed sum) was a strategic alliance of the two businesses. “The strategic fit between the two businesses was the most important part of the tie-up,” says Laker. “It gave MI strength and size in numbers and with us being an AR network and DA club, we complemented the Countrywide model which is completely different from our own. There are now three very different parts to the business.”
Stockton, who manages the whole
caboodle including Laker, says there were two big reasons for acquiring the business.
“Mortgage Intelligence gave us a lot of positives,” he explains. “We were looking into increase our market share and to improve our relationships with lenders across the market. Countrywide is the biggest estate agent, one of the biggest surveyors and the biggest conveyancer in the country. But we don’t have a working relationship with Barclays for example because it’s not on Countrywide’s panel.” That has changed with the purchase of MI, which last year distributed £400m of mortgage lending on behalf of Barclays’ mortgage brand Woolwich. It’s not just the lending side of the equation Stockton is thinking about either. He means to broaden the scope of Countrywide’s relationships with lenders such as
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