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Malone claims profit slump shows need to focus on FTS

The tumbling profits of estate agents and housebuilders are a warning that the mortgage industry should change the way it targets the market, according to Premier Mortgage Management managing director John Malone.

Amid profit warnings from Countrywide, one of the UK’s biggest estate agents, and mortgage broker Compass Finance, Malone warns that the market should stop concentrating on churning and change its target consumers.

Countrywide, which owns estate agency chains Bairs- tow Eves, John D Wood and Mann & Co, says it will make a loss for the first quarter of the year, with transactions down by 25-30 per cent on the same period last year.

Chairman Christopher Spor- borg says Easter is usually a very good time for transactions but this year there have been considerably fewer transactions than expected.

Countrywide says the lack of proporty sales has also meant fewer sales of accompanying financial products.

Compass Finance issued its second profit warning in the last two months, citing its over-expansion within a slowing mortgage market. It has inv-ested 740,000 in expanding its infrastructure since 2002 but has cut operating costs by 170,000.

Housebuilders are also feeling the effects of the market slowdown, with Wilson Bowden housebuilders cutting around 70 jobs since last September.

Malone says he has been in talks with lenders on changing their focus from remortgaging and the first-time buyer market to first-time sellers.

He says he has had optimistic feedback on the idea from lenders, including Halifax and Abbey.

Malone says: “Surely, the slowdown and the problems faced by estate agencies is telling lenders to take ano- ther look at how they are targeting the mortgage market. This obsession with churning has to stop, otherwise there could be some very difficult times out there.”


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