Mortgage broker writes-off Boomin investment

The Mortgage Advice Bureau (MAB) has written off its investment in collapsed challenger portal Boomin.

The broker entered a strategic relationship with, and invested £2.5m in, Boomin, last year.

It provided mortgage services such as calculators on the portal to help generate leads for its brokers.

But a trading update issued this morning shows the investment has been written off after Boomin announced last month that it is entering liquidation.

The update said: “We are disappointed that Boomin has recently been put into liquidation, having not been able to secure new investors in this challenging economic climate, which leads to a £2.8m non-cash write off for our investment.”

The update said recent turmoil in the financial and mortgage markets has meant house purchase activity was significantly reduced and re-financing was also impacted.
It said written business in October and November was circa 50% below expected levels. 

The reduction in mortgage activity and new house sales is expected to persist until early 2023, after which activity levels are expected to start to slowly build, the update said.

The company said its group's financial result for the year ending 31 December 2022 will be impacted by the adverse market conditions and adjusted profit before tax is expected to be below market expectations. 

It said: “Although purchase transactions will be markedly lower next year, overall we expect a second-half weighted recovery from the current exceptionally low activity levels as consumers adapt to a challenging but more stable macroeconomic and interest rate outlook.”

MAB said its re-financing opportunities from its client bank are at a record level for 2023. 

Peter Brodnicki, chief executive of MAB, said: "The consequences of the so-called mini-Budget have been quick and far-reaching. Overnight our market moved from being fairly stable and reasonably confident, to almost the polar opposite.

“The sudden and unexpected pace of mortgage rate increases, combined with the tightening of mortgage lending criteria, have resulted in some customers pausing both home-moving and re-financing plans.  

The recent Autumn Statement and the various Government changes prior to that have helped to stabilise markets. Although macro uncertainty remains for many reasons, we expect mortgage rates to continue to stabilise, allowing some customers to re-enter the home-moving market and also re-finance at more competitive mortgage rates than those seen in recent months.”