One in four brokerages could be sold
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One in four companies in the UK mortgage broker industry could change ownership as a result of the current economic climate, claims a new study by financial analysts Plimsoll.
It says with a surprising number of cash rich competitors waiting in the wings the market could be set for a prolonged period of consolidation.
David Pattison, author of the new Plimsoll Industry Analysis - Mortgage Brokers, says: “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market.
“With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being it really is a buyers market out there for cash rich companies.”
Its analysis has identified 92 companies that have a sizeable cash reserve sat on their balance sheets that, due to record low interest rates, is generating nothing.
Pattison, says: “These companies are now in the position to buy up large chunks of market share at rock bottom prices and make that money work for them.
“They must be like kids in a sweet shop at the moment - all those distressed competitors available at a fraction of their true value. The UK mortgage brokers market is still widely regarded as one of the UK’s most fragmented sectors.”
Its reports analysed the UK’s leading 369 companies and rated each one on their acquisition attractiveness.
