Shares in Mortgage Advice Bureau (Holdings) PLC (AIM:MAB1) subsided sharply as it warned on profits after completed business in October and November was 50% lower than expected after the rise in mortgage rates that followed former chancellor Kwasi Kwarteng's 'mini budget'.
The home loan broker expects the "exceptionally low" levels of mortgage activity and new house sales to last into next year, before starting to "slowly build" back again.
Adjusted profit before tax for 2022 is now seen coming in "slightly below" market expectations, even though the company said it has grown market share to 7% for the first nine months of the year, up from 6.1% a year earlier.
As for 2023, profit is expected to be "considerably impacted", weighted to the second half of the year, with current levels of mortgage activity leading to a reduction in expected adviser numbers.
Lower housing market activity, a fall in adviser numbers in the first half and tighter levels of underwriting criteria introduced by banks and building societies will also be contributing factors, it added.
It expects there will be a recovery in mortgage lending, more apparent in the second half, with consumers seen adapting to the "challenging but more stable" macroeconomic and interest rate backdrop.
MAB noted that the UK market has an estimated 1.8mln existing mortgage deals that will expire in 2023, with product transfers predicted to represent a higher proportion of re-mortgaging transactions than prior years.
"Accordingly, we will ensure our resources are re-deployed where our advisers and customers need them most, with lead generation being a major area of focus," it said.