LendInvest shares fall 37% as investors weigh mortgage market uncertainty

Lender downgraded its year-on-year profit expectations to be flat.

Shares in listed property finance platform LendInvest have now fallen over 37 per cent since Friday’s close, after investors responded to warning signs in the UK mortgage market.

In an otherwise positive trading update, CEO Rod Lockhart cautioned investors on Monday that the lender is: “acutely aware of the disruption in the UK mortgage market, which is affecting confidence and for the moment, applications for new mortgages have slowed across the market.”

The mortgage market chaos has come in the wake of Chancellor Kwasi Kwarteng’s mini-budget on 23 September, which triggered turmoil in the financial markets.

While the Bank of England stepped in to start buying some £65bn worth of UK gilts, markets have yet to settle.

High street mortgage lenders initially pulled lending products from the marketing, including fintech lenders like Habito and Atom Bank, while many have now returned to the market albeit at significantly higher rates.

LendInvest is extremely well positioned to lend, with £950m worth of lending headroom, along with a new £180m lending partnership with Lloyds Bank and an expanded £1bn deal with JP Morgan.

But despite the headroom, LendInvest downgraded its outlook for profit this year, saying that the figure would likely be flat.

“We now expect that profit before tax for the full year will be in-line with the previous year. We have taken this cautious approach mindful of the significant difficulties in short term forecasting given the economic and market backdrop,” the company wrote.

LendInvest shares closed at 97.5p on Friday, and are now trading around 61.5p.