A Surge in Mortgage Business Boosts LSL’s Financial Services Arm

LSL’s financial services arm has experienced a significant surge in mortgage business at the beginning of this year, with the level of applications in the first two months of 2024 surpassing expectations and showing a five per cent increase compared to its strong performance in 2022. According to the trading update from LSL, the rise in applications is expected to positively impact the level of completions during the first half of this year. The completions have been in line with expectations, reflecting the company’s opening pipeline at the start of the year.

LSL has noted a material and sustained increase in valuation instructions since mid-January, which is attributed to its contract wins and the rise in market activity. This surge in valuation instructions has also been linked to a reduced share of product transfer business. The income generated by the surveying and valuation business has seen a significant increase, with a 50 per cent rise in the first two months of 2024 compared to the equivalent period in 2023. In February, the division’s income reached its highest level since the aftermath of the mini Budget.

The estate agency franchising division has also seen positive results, with a profit of nearly £1m in the first two months of 2024, a stark contrast to the losses experienced during the same periods in 2023 and 2022.

Following a positive Q4 last year, momentum has increased across the business for LSL. At the end of February, the underlying operating profit was ahead of the board’s previous expectations and around £7.5m higher than the same period last year, as well as approximately £2.5m up on 2022. This surge in profit is attributed to strong activity within the surveying and valuation division.

However, the acquisition of the TenetLime mortgage network, completed last month, has caused the company’s net cash to fall from £34.9m in December to £28m in February.

Looking ahead, LSL has reported improved conditions in the mortgage and housing markets, but has also stated that it is difficult to predict the future path of these markets with confidence. Regardless, based on early trading, the company expects its profits in 2024 to be materially ahead of 2023.