Like most football fans I found myself oddly fascinated by the end of this summer’s ‘transfer window’ as some of the biggest clubs in the world fought to strengthen their team by acquiring the best players from other clubs.

Of course, as fans we all know that, just because your club spends some money and adds some new faces to its squad, this is by no means a guarantee of success. What it does represent, however, is a statement of intent — a desire to grow, to be better and bigger than before. And so it goes with some of the mergers and acquisitions (M&A) activity in both the mortgage and technology markets over the summer.

These firms have done their research and come to disrupt

We have seen private equity firm EQT have an offer accepted to buy Iress, RVU Group acquire Mojo Mortgages, Better acquire Trussle, Starling Bank acquire Fleet Mortgages, and Athene acquire Foundation Home Loans… I could go on.

Strategic plays

A lot like the watching of the football transfer window, this level of M&A activity in our market is unquestionably fascinating to observe. However, unlike in football, it is not the short-term results of these transactions that will impact these businesses (and the wider market) the most, but the longer-term implications of the strategic plays that are beginning to unfold across the market, particularly in relation to the provision and use of technology.

You only have to look at some of the names involved here to realise how significant these ‘transfers’ could be. Silver Lake, which is behind the combined RVU/Zoopla Group that now owns Mojo Mortgages, is a £30bn private equity firm with investments in Tesla and Alibaba, among others. Better, which has acquired Trussle, recently announced plans for a $7.7bn (£5.6bn) listing in the US, supported by a $1.5bn investment from Softbank. These are firms that have done their research on this market — they have come to disrupt it, and they have the capital and the ambition to do so.

More of the smaller tech players will become part of larger businesses

Given the huge swathes of capital that remain undeployed, particularly in private equity houses, it is likely we will see more of this type of activity and even more new entrants wanting to invest in the UK mortgage market — primarily with a focus on technology.

That said, it seems likely we will also see continued investment from existing players.

We all know about the Connells acquisition of Countrywide, but other deals — such as Socium Group’s acquisition of Charles Cameron, and the joint venture between LSL Property Services and Pollen Street Capital, known as Pivotal Growth and run by Simon Embley — have so far gone under the radar.

There can often be quite a difference between a great piece of technology and a successful business

There are some exceptionally successful businesses already operating within this market, on both the adviser and lender sides, and these businesses also have capital to deploy to accelerate growth through acquisition. It seems likely, therefore, the competition to do deals, and possibly the price of those deals, is likely to increase as we move into 2022.

Consolidation

Consolidation in the technology space seems likely, too. We continue to have many small, disparate companies trying to offer broadly similar solutions to the same market.

The competition to do deals, and possibly the price of those deals, is likely to increase as we move into 2022

There can often be quite a difference between a great piece of technology and a successful business. I expect more of the smaller technology players in this space to become part of larger businesses as the year progresses, ultimately resulting in more comprehensive solutions from fewer providers.

Unlike in football, where the transfer window has now slammed shut until January, the market to sell and acquire businesses in the mortgage market is very much open and, in my view, activity levels will only increase. Watch this space!

James Tucker is chief executive of Twenty7Tec