High interest rates on mortgages helped property lender Together post profits of almost £50m during the final three months of 2023, according to new figures.
The Cheshire-based company achieved an underlying pre-tax profit of £47.7m in its second quarter as its loan book increased to £6.8bn while it’s average monthly lending grew by 9.7 per cent to £233m compared to the same period in 2022.
The results were achieved despite demand from buyers being “strongly affected by volatility” in the mortgage market.
However, Together has said the situation is “starting to settle” and that it expects demand to grow in the coming months if inflation holds steady and the Bank of England cuts the base rate of interest.
Alan Davison, director of customer sales at Together, said: “The latest Office for National Statistics (ONS) figures, showing a slight drop in UK house prices, could be seen as a downbeat trend in market confidence.
“However, what’s more likely is that this dip is a continuation of the market re-adjusting to follow an upward trend after the house price boom during the pandemic, caused by the temporary relaxation of stamp duty on property purchases.
“Buyer demand and the impact that has on prices has been strongly affected by volatility in the mortgage market which, thankfully, is now starting to settle.
“However, with inflation holding steady and expected cuts to the Bank of England’s base rate in the next few months – affecting mortgage interest rates – we would expect demand to grow.
“Our own research shows that demand for property remains strong, with more than half (52 per cent) of millennial first time buyers saying they would invest at least £25K more into property if given the
chance.
Together is headquartered in Cheshire.
“And, as mortgage rates start to settle and with economists anticipating a cut in the Bank of England’s interest rate as early as May; we may see demand from hopeful buyers start to improve.”
Founded 50 years ago, Together provides commercial and personal mortgages, bridging loans, Buy-to-Let mortgages, development finance and second charge loans.
Group chairman Mike McTighe said: “Together achieved another strong set of results in the quarter to 31 December, reflecting the sustainability of our business model and the commitment and dedication of our team.
“We maintained a controlled growth in lending at attractive margins and delivered increased net interest income, profit before tax and cash receipts.
“We also continued to diversify our funding, raising or refinancing over £1.1bn of facilities and achieving a rating upgrade to ‘BB’ from Fitch during the quarter.
“Looking ahead, while inflation has continued to fall, GDP growth is forecast remain subdued and interest rates look likely to remain higher for longer.
“Despite the prevailing economic uncertainties, as we enter our 50th year in business we remain cautiously optimistic about the future and will continue to help our customers realise their ambitions and play our part in supporting the UK economy.”