Housing finance broker Mortgage Choice Ltd says its profit will fall by up to 45 per cent in this financial year due to a slowing housing market.

Managing director Paul Lahiff said the company’s profit for 2008/09 will drop by 40 to 45 per cent, from $19.34 million last year.

Mortgage Choice declined to provide profit guidance at its August annual results announcement, due to uncertainty relating to settlement volumes, lender commissions, the spread of business amongst lenders and the economic environment.

But the first four months of trading in the current year had enabled management to offer guidance, although “significant uncertainty” still surrounds key variables, Mr Lahiff said.

“The key factors impacting the guidance relate to slowing housing finance approval levels and the change in commission structures announced by lenders during the course of 2008,” he said in a statement.

Despite the profit downgrade, Mr Lahiff said the company was confident of meeting the market challenges.

About 40 per cent of all mortgages continue to originate from mortgage brokers, and Mortgage Choice has an ongoing income stream from its loan book of $34 million, he said.

Lower interest rates and enhanced incentives for first home buyers from both the federal and NSW governments have also provided optimism for the housing market, Mr Lahiff said.

“Mortgage Choice is looking to a solid financial and operational performance in the 2008/09 financial year,” he said.

There had been no further talks with Count Financial Ltd since its attempt to takeover Mortgage Choice in July, Mr Lahiff added.

Count’s offer valued the target at $124.36 million, and was rejected as too low by Mortgage Choice.

Count increased its stake in Mortgage Choice from 4.9 per cent to 15.2 per cent in late August, Mr Lahiff said, but no further discussions have been entered into in relation to a takeover.

It is “business as usual” at Mortgage Choice, he said.

Mortgage Choice shares ended steady at 80.5 cents/

AAP