Just now, the news is in, Anne Boden’s Starling Bank has announced the acquisition of specialist buy-to-let mortgage lender Fleet Mortgages in a £50 million cash and share deal.
Fleet Mortgages, based in Hampshire, focuses on providing mortgages to professional and semi-professional buy-to-let landlords, only via mortgage adviser distribution channels.
To date, it has originated £2.3 billion of mortgages and experienced zero credit losses. It currently has circa-£1.75 billion of mortgages under management. Starling will become the sole funder of future originations, with Fleet Mortgages able to build on its successful lending operation by accessing Starling’s growing deposit base. Day-to-day operations at Fleet will continue unchanged with the company’s existing and highly-respected management team.
The acquisition – Starling’s first – is part of a wider plan at the bank to expand lending through a mix of strategic forward-flow arrangements, organic lending and targeted M&A activity.
Anne Boden, CEO of Starling, said: “The acquisition of Fleet Mortgages is the start of our move into mortgages as an asset class and builds on a number of forward-flow arrangements that we’re doing with leading non-bank lenders.
“Fleet’s existing management team will remain in place and Fleet will continue to operate as a stand-alone company, keeping the original name and brand. We’re buying Fleet because it is very good at what it does, not because we want to change it.”
Bob Young, CEO of Fleet Mortgages, said: “We are very pleased to be announcing the acquisition of the business by Starling Bank which will deliver a significant benefit to the business, our intermediary partners and their landlord clients. It is certainly exciting times ahead.
“We started Fleet Mortgages seven years ago and have grown to become a successful mortgage originator with nine well-received securitisations. 2021 is set to become our best year yet with new mortgage loans running at £800 million and half-year pre-tax profits of £4 million.
“Starling Bank will take over all of our funding, allowing us to focus on achieving our significant and ambitious lending and growth targets. This is a natural progression for our lending business, with both Starling and Fleet sharing a very similar cultural fit, and provides us with a very strong lending base from which to work and to deliver for our staff, our adviser partners and our landlord customers.”
Starling Bank was advised by Rothschild and PwC as financial advisor and TLT as legal counsel. Fleet Mortgages was advised by West Hill Corporate Finance as financial advisor and Humphries Kirk as legal advisor.
Headquartered in London, Starling Bank also has offices in Southampton, Cardiff and Dublin and provides B2B banking and payments services through its Banking-as-a-Service model based on the proprietary technology platform that it uses to power its own bank.
Fleet Mortgages is a buy-to-let and specialist lender founded in 2014 by the ex-management team of Capital Home Loans and based in Fleet, Hampshire. Lending exclusively through the intermediary sector, it offers buy-to-let mortgages for residential landlords as well as limited companies and those seeking finance for Houses in Multiple Occupation (HMOs).
— Press release