Brokers welcome Countrywide float as sign of confident housing market

Mortgage brokers have welcomed Countrywide’s decision to float as a sign of confidence in the UK housing market.

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In its annual investor report for 2012, published last week, the property giant confirmed it is aiming to raise £200m on the London stock exchange.

John Charcol senior technical manager Ray Boulger says the decision shows Countrywide expects the market to continue to perform.

He says: “It is positive as the time to float is not at the top of the market but when there is growth still to come. Countrywide will have done its homework to sound out investor appetite so this is positive for the property market. I would expect a couple of other big property firms to float too over the next year.”

Legal & General mortgage club managing director Ben Thompson says the move is a positive endorsement of Countrywide and the wider housing market.

He says: “Those in the market have felt it improving for more than six months so the timing of the float is excellent. The housing market is coming out of a very difficult five or six years.”

But Your Mortgage Decisions director Dominik Lipnicki says: “Rather than a float being an endorsement of how fantastic things are, it is more likely that the private equity backers can see little improvement or change in the short to medium-term so they may as well float now.”

Countrywide’s results show it made a pre-tax profit of £53.7m for the year, 18 per cent higher than the £45.6m pre-tax profit seen in 2011.

It also shows the firm has set aside an extra £25m to deal with a “substantial” increase in valuation claims from lenders.

The firm blames the huge claims pot on prime lenders submitting claims concerning over-valuations from 2006 and 2007 before the six-year statute of limitations expires.

The firm initially set aside £11.9m in its 2010 results to deal with the deluge of valuation claims but scaled the pot back to £9.3m in 2011.