How I spotted a profitable niche in the mortgage market

Dave Symondson started selling specialist mortgage products to cash-strapped borrowers through his start-up business MD Nationwide - a risky strategy that paid off.

Dave Symondson now 45 had a front row seat as Britain's home loan market boomed in the late 1990s. He was the lending manager at a financial services firm. "Credit was easily available, house prices were soaring and everyone was desperate to get onto the property ladder."

Nonetheless, Symondson felt "most of the money was going to other people". So he teamed up with a former colleague, Nick Clark, to launch a new mortgage firm.

Through personal savings and borrowing they managed to raise £120,000 between them to set up MD Nationwide just outside Southampton in 1999. The plan was to target cash-strapped borrowers who needed specialist products. It was a risky, but also a high-margin business.

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Some of the money paid for advertisements in local papers and leaflet drops. When anyone phoned in, Symondson tried to cross-sell as many products as he could. "Lines of credit were readily available so we were able to offer lots of different products." Symondson also hired "a few students" to staff a call centre. It was a tough first year, "it was about survival more than anything else", but by the end of it the pair had hit their £300,000 sales target.

However, they weren't happy. "It wasn't scalable. We were working flat out." The solution was technology; over the next year they spent more than £100,000 on two new vital pieces of kit. First, they hired a programming firm to build a customer relationship management system.

This helped them process new customers and keep track of existing ones. "It meant we could handle a lot more clients." Then they set about looking for new clients via their second investment in a predictive call dialler. This could handle 4,000 numbers a day. Once it got through, it would instantly transfer the live call to one of Symondson's operators.

The strategy worked. With business booming, MD Nationwide moved to bigger premises and hired more call centre staff. By 2003 annual sales had reached £3m. Higher sales figures now gave the pair more of an edge in negotiations with mortgage providers. "We were able to get better products to pass on to our customers."

However, a year later, "the figures started to slow and we realised we had to try something different again". So they set up a business-to-business mortgage provider called Bananas. It offered independent advisers a selection of mortgages, and handled the administration.

They also launched a nationwide marketing push at MD Nationwide. "We went for national newspapers, TV and online." The campaign cost £500,000 a month at its peak, but it paid off. Sales hit £15m in 2005 and profits hit £1.8m. Bananas also contributed, with £2m in annual sales.

By 2006 the pair were ready to move on. "Selling the business had been our plan since we started." They made others in the industry aware and sat back and waited. In 2007 MD Nationwide was snapped up by Beacon Mortgages. "The sale was in line with an industry standard of four times pre-tax profits."

Symondson isn't taking early retirement though he is now a partner in private equity firm Hamilton Bradshaw Venture Partners.

James graduated from Keele University with a BA (Hons) in English literature and history, and has a NCTJ certificate in journalism.


After working as a freelance journalist in various Latin American countries, and a spell at ITV, James wrote for Television Business International and covered the European equity markets for the London bureau. 


James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. 


He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.