Mortgage servicer HML has set out ambitious growth plans to double the size of the business and create a Northern powerhouse servicing other firms’ mortgages.
The Skipton-based firm is looking at a number of options and these could include making an offer for the mortgage servicing part of UKAR, which took over the “bad” parts of Bradford & Bingley and Northern Rock at the height of the financial crisis.
HML’s CEO Andrew Jones said: “UKAR is one of the opportunities in the market place but there is no certainty that HML will participate in any transaction.
“We’re looking for opportunities that would help us to continue building our footprint operating out of Yorkshire and Lancashire and which play really strongly to our Northern Powerhouse aims.”
Mr Jones said there are a number of similar opportunities elsewhere.
A year after being sold to global financial services firm Computershare, HML is set to recruit a further 60 people in Skipton over the next 12 months.
The business, which was sold by Skipton Building Society nearly a year ago, is already the UK’s biggest third party mortgage administrator.
Mr Jones said the mortgage servicing market makes up just six per cent of the industry, which means that only six per cent of mortgages are outsourced with the remainder being done by lenders in house.
“There is huge potential to grow,” he said.
“The outsourcing market could grow to 15 to 20 per cent of the overall market.”
He said a key driver for growth will be new entrants to the market who may decide they don’t want to service mortgages in house and would rather get in a team of experienced professionals, allowing them to focus on core growth areas.
“It’s a much more effective business model to outsource the servicing side,” said Mr Jones.
“Big retailers are looking at coming into the market in the same way as Tesco did.”
Another growth area is lenders who are targeting niche housebuyers, such as people who are self employed or have a poor credit history.
“We think this market will grow and we have a very strong proposition in terms of cost model, systems and savings,” said Mr Jones.
A third area for growth is when mortgages are bought from existing lenders, for example UKAR is in the process of selling £13bn worth of mortgages and a buyer could well decide to outsource the servicing side.
“This area presents a big opportunity for us,” said Mr Jones.
“When these type of transactions happen the seller typically has a platform, but the buyer doesn’t. We are making sure we’re well connected relative to this type of opportunity. We are trying to get more involved with buyers of assets as they do due diligence, including doing the valuations with them.”
Mr Jones, who grew up in Macclesfield and went to Manchester University, said the success of the North of England is an issue that’s very close to his heart.
“We are a Northern-based business. We are a thriving business that’s recruiting.
“Our strategy is to operate out of the North of England and we will always look to consolidate the servicing opportunities we secure into our Northern business.”
HML is being run as a standalone division in Computershare, which is best known in the UK for its share registry and employee share plans.
“We are the foundation stone for growth for Computershare in the UK and Europe,” said Mr Jones.
“Skipton Building Society were quite cautious about growth and new areas. There is always risk and Computershare has a much more balanced approach in terms of understanding the risk.”