OSB Group posted new lending down 19% to £4.7bn in 2023 compared to a year ago, due to “difficult mortgage market conditions and subdued purchase activity”.
The FTSE 250-listed lender — which includes OneSavings Bank, Kent Reliance and Charter Court Financial Services – added that “rising costs of living and borrowing were reflected in subdued purchase activity across all mortgage market sectors,” in its full-year results statement.
Buy-to-let originations fell 13% to £1.6bn in the period “as overall market segment volumes reduced significantly”.
It added that BTL borrowers continued to favour five-year fixed-rate mortgages, which represented 74% of Kent Reliance completions in 2023 (down from 83% a year ago), “however an increasing proportion of customers elected to take shorter-term mortgages in anticipation of falling interest rates”.
However, the group’s statutory loan book grew by 9% to £25.8bn, which comprises landlord, commercial, residential development and funding line loans to non-bank lenders.
The firm expects underlying net loan book growth of around 5% in 2024, based on current application volumes and against the backdrop of a lacklustre mortgage market
The business posted pre-tax profit down by 30% to £374.3m, blaming adverse effective interest rate adjustments.
OSB Group chief executive Andy Golding said: “The group’s target professional landlords continue to demonstrate resilience, supported by high levels of demand in the private rented sector, long-term income improvement and a reduction in the cost of borrowing towards the end of the year.”
Shares fell 17.4% to 380.60 in early trading.
The business added that chief financial officer April Talintyre will retire at its annual meeting on 9 May, deputy chief financial officer Victoria Hyde will act in her place until a permanent replacement is appointed.
Meanwhile, the group said that Precise Mortgages will rebrand as Precise, with a new brand image, while its broker website has been rebuilt to include new tools and updated functions.
The move follows the launch of OSB Group’s registration portal, introduced last month, which allows new brokers to register with Precise, KRFI or InterBay, or all three, using a single registration process.
