Belvoir Group has defied difficult conditions in the housing sector and UK economy to report a ‘stronger than expected’ half-year result.
Revenue at the Lincolnshire-based company, one of Britain’s largest franchised property businesses, rose by 3 per cent in the first six months of 2023.
Turnover in its financial services arm grew by 11 per cent as soaring mortgage rates drove up demand for refinancing and product transfers from Britons seeking advice regarding more favourable borrowing terms.
Rental boom: Belvoir Group observed an increase in management service fees from lettings amidst a surge in Britons deciding to rent homes during the first half of the year
The division further benefited from the £3.7million takeover of TIME Group last year, which significantly boosted its number of mortgage advisers.
This offset falling sales in its property segment, although the firm’s underlying sales declined at a slower pace than the overall volume of UK housing purchases.
Belvoir also observed an increase in management service fees from lettings.
Unlike many rivals, the company operates a franchise model, whereby it allows firms to use its branding, products and processes in return for receiving royalty fees.
Dorian Gonsalves, chief executive of Belvoir, said: ‘The outperformance of our business model continues to reflect the entrepreneurial nature of our franchisees and self-employed financial services advisers, who remain entirely focused on maximising the opportunities presented in all market conditions.’
Fourteen successive base rate hikes by the Bank of England to try and dampen inflation are inflating borrowing costs, weakening the market for home buyers.
At the same time, tax changes and new energy efficiency regulations have led to many buy-to-let landlords selling up, while restrictive planning rules have constricted housing supply.
Consequently, average UK rental prices outside London have climbed to £1,231 per month and a record £2,567 per month in the capital, according to the property website Rightmove.
Belvoir, which manages around 75,500 properties, has profited from these underlying market dynamics over the past couple of years.
But much of its recent growth has come from acquisitions, including estate agency Mr and Mrs Clarke, and student lettings specialist Nicholas Humphreys.
In 2022, the company posted its 26th successive year of rising profits even though the housing market saw sales badly impacted by former Prime Minister Liz Truss’s controversial mini-budget.
Belvoir Group shares were 5.2 per cent higher at 202.5p on late Thursday afternoon, although they have still contracted by approximately 38 per cent since peaking in summer 2021.
