ISSUE 13 JAN/FEB 2021
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Acknowledgments Editor-in-chief Beth Fisher beth@medianett.co.uk Creative direction Beth Fisher Caron Schreuder Sub editor Andrea Johnson Contributors Richard Reed Martin Morris Sales and marketing Caron Schreuder caron@medianett.co.uk Special thanks Laith Mubarak, Click Above Julie Wilson, The Strong Agency Jodie Murrary, Boxtree Recruitment Naomi Little, Boxtree Recruitment Cath Shuttlewood, SY1 Consulting Geoff Robjent, Four Communications Chantal Heckford, DF Capital Nick Wilcox, Valorem Partners Hannah Polson, Cognito Media Matthew Corker, Knowledge Bank Joseph O’Brien, Shawbrook Bank Printing The Magazine Printing Company Design and image editing Russ Thirkettle, Carbide Finger Ltd Bridging & Commercial Magazine is published by Medianett Ltd Managing director Caron Schreuder caron@medianett.co.uk 3rd Floor, 71 Gloucester Place London W1U 8JW 0203 818 0160 Follow us:Twitter @BandCNews | Instagram @BridgingCommercialMagazine
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his time last year, we wouldn’t have even considered the possibility and subsequent challenges of a national lockdown—let alone three of them. However, this latest one proves that, as time moves on, people adapt. In a feature B&C published in early January, the bridging industry responded optimistically to the current situation, with many announcing that they were returning to the protocols previously adopted and utilised so well during 2020, and maintaining the momentum that the property market experienced towards the end the year. Notwithstanding, the associated administrative disruption expected to further accentuate the bottleneck of applications in the run up to the stamp duty holiday deadline, in addition to lenders continuing to be cautious in their approaches— and rightly so—it’s more important than ever for brokers to grasp who and what is available to assist them with their cases. Consequently, tools like Knowledge Bank—which we crowned 2020’s best performing BDM [p12]—will continue to be increasingly useful for intermediaries as lending gaps swell and contract in accordance with risk appetite linked to the macro economy and environment. It is also arguably the best time for a bridging and commercial finance comparison site to arrive on the scene. Propp’s mission is to improve choice, costs and timescales for borrowers, while raising the bar for the benefit of brokers and lenders alike, in a bid to drive the market into a new age of transparency. I am interested to hear what you think of our conversation [p18] with its creators. One sector that many brokers have been clambering to find funding solutions for semi-commercial [p36]. We investigate why the demand for this asset class has risen, the confusion caused by the various affordability assessments, and which lenders are truly showing their support for these deals. After a trying year, we look at the ways in which businesses can help rebuild our industry—starting with boosting the routes into it [p70]. We speak to graduates and trainees in our sector about what they are learning and enjoying, and how their input is helping to progress the companies they are in. We also discuss what is changing in our recruitment practices and how Covid-19 isn’t solely to blame for some of the greatest challenges in attracting and retaining talent [p29]. There is plenty to inspire you in this issue (if you ever wondered what it’s like to kayak in the Arctic, skip straight to p64) and our second annual Power List [p46] is the star. We were inundated with heartfelt nominations (one person who made the list had almost 20 different recommendations from his peers) and it was incredibly difficult to pick the final 40 (we were toying with the idea of a top 60, but why stop there? Why not 100?! We loved them all—and we only have so many column inches). Hours were spent reading, in awe of their achievements (big and small); they really made a difference to their colleagues and the wider industry during the toughest period most of us are ever likely to withstand. Each and every one of them went above and beyond during 2020 and will be integral to the market’s recovery and growth this year. This is why I think there is so much optimism among us now. In the face of everything, we pull up our socks and venture on—nothing short of triumphant.
Beth Fisher Editor-in-chief
3 Jan/Feb 2021
We’re not altruists, but we know that progress should improve things for everyone p27 4 Bridging & Commercial
8 12 29 36 40 46 60 64 70 78 82 84
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‘They had the same ethos: the customer is key’ WORDS BY CARON SCHREUDER
Shawbrook fast-tracks its plans and covers more regions after acquiring RateSetter’s development loan book
News
I
n December 2020, Shawbrook Bank made headlines after acquiring RateSetter’s development finance loan book—and bagging its team, too. I managed to steal some time with Terry Woodley, managing director of development finance, after the festive period to obtain some background into the move and find out what the bank’s aspirations are in this part of the market. Terry starts by telling me that the opportunity came to his attention quite late last year and, being aware of RateSetter as a business and what it stood for, he was immediately intrigued. Regularly coming up against the P2P provider when it came to Shawbrook’s own development lending, Terry recognised the likely compatibility that may exist between the two. It turned out he was correct. Once talks began, the deal moved quickly. “They aligned very nicely with what we do, and our client base and principles,” he says. Digging a bit deeper into exactly what made this such a synergistic prospect, it transpires that RateSetter had a focus for the underserved SME developer, much like Shawbrook does. In addition, Terry thoroughly approved of its lending policies and had received positive feedback from borrowers who had dealt with RateSetter. The way the lender showed support during Covid-19 also impressed him. “I got the feeling that they had that same ethos: the customer is key,” he expands. “You can lend money, but it’s really how you deal with that customer—how you help and support them—for the whole life of the loan.” Understanding what RateSetter’s appetite was— and confirming that it matched that of Shawbrook— formed a key part of the due diligence process.Terry explains that the last thing he wanted was to acquire customers, only to be unable to offer the sort of support they were used to later down the line. “That just wouldn’t be right or fair to the borrower, with whom we want to work long term.” The acquired portfolio totalled £167m and resulted in more than 100 borrowers being added to Shawbrook’s customer base. It also meant that the development finance department jumped to 35 people, almost double what it was. Bringing the team on board aids the all-important continuity and smooths the transition for borrowers. The only change for those clients will be the branding, really, as they will be retaining their existing contacts. A difference between the two lenders lies in their funding: RateSetter has a P2P model and Shawbrook is backed by deposits. However, according to Terry, borrowers will feel no difference whatsoever in terms of their current facilities. With stage one of the acquisition complete, Terry reveals that the next step is all about getting to know its new borrowers and making sure they are comfortable and understand “who we are and how Shawbrook operates”. Over the past four years, Terry has been building the development finance offering and enjoying its
“rapid growth”. The incorporation of the RateSetter team has allowed him to bring his medium-term plan forward significantly. This includes expanding into several areas of the country with the help of the additional regional business development managers now on board. The lender is set to establish a foothold in Wales, Leeds and the Midlands, as well as increase its presence in Bristol, where it has had fantastic results. “There will be no changes to products,” Terry states, “and we certainly do not change them based on regional location.” Shawbrook has one standard development product, but looks forward to introducing its new clients to the breadth of the bank’s overall proposition. “We have our property division that offers BTL, bridging and development exit lending,” he comments. “If they’re building to hold as an investment, we will certainly introduce them to our BTL team. If they want to do a development exit facility, they can meet our bridging team.” It is my impression that every development loan provider we talk to dedicates itself to supporting SME developers, which makes me wonder: are they still underserved? “That’s a great question,” Terry muses, “and borrowers do have more options now. That said, while there is liquidity looking for a home via debt funds, for example, that’s often not the same thing as working with a lender who really gets the challenges involved in any scheme—and is prepared to be there for the long term.” Terry believes that more can be done to create products that apply to the full lifecycle of a scheme. With, say, build and hold strategies more common now, funders aren’t keeping up. Touching briefly on areas of the market that could prove advantageous for brokers, lenders and developers alike, Terry’s got his eye on modular construction and is currently in talks with borrowers to gauge their views and, once it is safe to do so, he will visit factories to find out from manufacturers what hurdles they may be facing. It is, however, a case of a larger, more mainstream lender having to go first. “It’s been talked about for quite a while now, but no one really seems to have put their finger on actually finding a solution to [it]. How all parties— lenders, modular constructors and borrowers—can work together to provide a good product.” He thinks that this could be the next real opportunity in the market. “The whole sector continues to operate in a system that stymies innovation . . . uncomfortable lending against anything that’s new or unusual, so developers stick to what’s tried and tested. This has got to change,” he urges. In December, Shawbrook’s property development arm had lent over £750m to UK housebuilders since inception. Terry doesn’t want to put a number on what his aspirations for the book are, per se; he is concentrating on keeping deals flowing. “Development finance is reasonably short lending, so you’re constantly rolling and replacing,” he says. “We have huge capacity, but the key thing is for us to continue momentum.” 9 Jan/Feb 2021
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Interview
2020’S BEST PERFORMING BDM Over the course of the pandemic, we’ve continually heard about the handful of businesses which have thrived—the outliers that are somehow coming through the other side in a better position than they went in. Knowledge Bank is one of these, and its founder and CEO, Nicola Firth, never imagined a crisis being the reason for the business finding its true calling
We constantly write about the myriad frustrations and challenges felt in the market, and love to assemble opinions on what is going well, and the things we’d like to be done better—it’s pretty much the backbone of trade publishing. Rarely, however, do we see someone knuckle down and create the solution to a common issue and, in doing so, improve the sector as a whole. Knowledge Bank, set up in 2015, was Nicola’s answer to a lack of clarity and homogeneity for mortgage advisers when it came to product criteria. Her own background as a broker meant she often felt like she was “scrambling around in the dark” despite all the tools available, because they left out a crucial component: criteria. Her ambition was to replace the countless scattered spreadsheets that held this vital information and distil it in a bank of, well, knowledge.
12 Bridging & Commercial
Interview
Words by
caron schreuder
13 Jan/Feb 2021
Interview
“Like a bank account, you put in and you can take out,” she explains, recalling the early concept of the platform. “When you have some criteria, instead of storing it on a spreadsheet, you store it on Knowledge Bank, then other brokers can contribute to that, and they can deposit criteria and take it out again.” Lenders, Nicola soon found, were extremely keen on having a presence on such a tool and their willingness to add to the data is what shaped the Knowledge Bank that is live today.
“Within 24 hours, Knowledge Bank had built and gone live with a free-to-access tool for all brokers that detailed various lenders’ stances on payment holidays” Nicola recounts that it was important they had the right spread of lenders and product types, ranging from residential and BTL to second charge, equity release and bridging and commercial. She believes that including criteria across a variety of offerings increases brokers’ confidence in those areas or, at least, encourages them to refer to a specialist. “Of course, residential and BTL is a big part of the mortgage market, but those customers are also business owners and they also need bridging loans,” Nicola says. “What we wanted to facilitate is not necessarily brokers trying to be an expert at everything, but at least being able to have better quality conversations with their clients.” I grill Nicola as to why, given the ubiquity of the need for it, no one had launched something like Knowledge Bank before. Her preliminary conversations shed light on a general assumption that it couldn’t be done because lenders were not forthcoming with their full criteria. “My response to that was, they will if they want to lend,” she recalls. “It’s like walking into a shop and all of the shelves are empty and they’re playing a game of ‘guess what we sell?’ No, you tell me what you sell, and I’ll see if I want some. That’s how it works.” 14 Bridging & Commercial
Nicola suggests that perhaps this sort of leadership should have come out of mortgage networks and clubs, or one of the product sourcing systems. The latter option posed a problem in that, quite often, they failed to paint the full picture, especially when it comes to specialist products such as bridging and commercial loans. In fact, when she approached commercial lenders about joining Knowledge Bank, Nicola was told it wasn’t “right” for them. This attitude soon changed when she explained that her tool would be illustrating criteria and an indication of appetite, rather than products. Knowledge Bank operates a subscription model by which brokers pay a monthly fee that gives them access to the database and regular email updates and invitations to online events; the tool does not show actual applications or business placed as a result of using it. Lenders are not charged for being listed on the platform, and benefit from the extensive information derived from the thousands of searches done by brokers each month. “That data is anonymised, so they don’t see which broker is searching for what,” Nicola explains, “but they can see in certain parts of the country what’s popular, why brokers are searching for that, and the categories they’re searching for at the same time.” Nicola emphasises that understanding what brokers are looking for is different from identifying the type of business that is being written: “The two aren’t always aligned.” Knowledge Bank does its part in highlighting gaps in the market by adding search categories that may be on the periphery now but, by giving brokers the option to search for it, could result in a surprising level of interest. For example, it has included a category about deposits coming from cryptocurrencies. By constantly reviewing the categories based on trends and market intel, aspects of the sector are being opened up and put on stakeholders’ radars. So, how did 2020 change Knowledge Bank and its purpose? As for most businesses, late March signalled an urgent call to action as Covid-19 struck and the country went into lockdown. Nicola and her team seized the opportunity to provide information, particularly as news of payment holidays from lenders came in thick and fast. Within 24 hours—yes, you read that right—they had built and gone live with a free-to-access tool for all brokers that detailed various residential and BTL lenders’ stances on this relief measure. After a matter of days, 1,800 new brokers had signed up to use it. To date, the site has 4,500 users overall and 273 lenders—32 of which joined in 2020. “We
Interview
just got our heads down and worked through the night,” Nicola tells me. “Everybody did their bit that was needed to make it happen . . . we knew we had to react quickly.” Being reactionary is not Nicola’s default setting but, in 2020, it was simply what was called for. She feels that this provision of information took the pressure off lenders somewhat, and it grew to encompass other Covid-related criteria. For instance, policy regarding loans to furloughed workers (a phrase no one had heard prior to the pandemic) and service level statuses— which were monitored by plugging into lenders’ application-to-offer timescales. According to Nicola, this proved helpful in opening up conversations about alternative products, such as bridging, in the case where published turnaround timeframes, owing to Covid, were no longer suitable for certain transactions. Since March last year, the system has reported over 30,000 changes to criteria—a staggering amount for brokers to contend with. Instead of them having to keep track of these daily shifts, which Nicola claims would be impossible, it is all stored in the platform, readily available. At the height of the first lockdown, users were emailed daily with details of the most recent changes and, although things have calmed down a fair bit, these updates are still distributed twice a week. When it was needed most, Knowledge Bank acted as a conduit for lenders to communicate the changes that they were experiencing and the decisions they were making about their offerings. Nicola is keen to express that the business is now where it always intended to be and is committed to facilitating the dialogue between brokers and lenders in a format that works, and with info that is relevant and useful. “We’d been around for a couple of years before the pandemic hit, and we’d had a lot of success with regard to lenders— and then when this happened, it was like a lightbulb moment,” she says. “Lenders are now switched on to the fact that Knowledge Bank is potentially their best-performing BDM because of its reach and coverage.” Knowledge Bank’s increased exposure in 2020 has resulted in lenders queuing up to join, and a recent partnership with the Financial Intermediary & Broker Association (FIBA) means that its bridging and commercial contigent is rising, too. This part of the market has, in Nicola’s view, been underserved by technology, and she hopes that having those working
in the specialist space interacting with the platform will help to expedite this progression. She confirms that her team’s level of engagement with lenders has shot up and thoroughly enriched the information that’s housed in the system— “the quality of the data is everything.” The addition of CPD-accredited online events—with titles such as Question of Knowledge, Lender Spotlight and Criteria Clinic—felt like a natural way to expand on all of the changes taking place in a connected setting. The most popular were the hour-long Criteria Clinics, in which several lenders were invited to really interrogate a particular subject, as well as assist with the placement of cases put forward during the live session. In spite of widespread Zoom fatigue, the bridging clinic in mid-November boasted the highest attendee count at almost 400. A collaboration with Roger Morris and Liza Campion of Precise Mortgages sees Nicola host the monthly Question of Knowledge webinar on a Friday afternoon, in which they discuss anything other than criteria. “It could be to do with legal matters, taxation, or credit,” Nicola expands. “This is the kind of stuff that brokers don’t get taught when taking exams, and they don’t necessarily learn it on the job either.” While the experience of last year has certainly taught Nicola to expect the unexpected, she does have a couple of predictions for what will (or should) be on all of our minds in the coming months. The stamp duty holiday, set to end soon on 31st March, will dominate this first quarter. “Bridging will see a real surge in business off the back of that.” Nicola also feels that the cladding scandal— which has left many unable to sell their homes—will need to be resolved this year. New related categories are being added to the platform, but she is finding that lenders haven’t quite figured out what their individual stances are, which is creating further murkiness around the issue. “It’s not going to go away; it’s going to gain momentum, and I can tell you that the FCA is now into that as well.” Another function of Knowledge Bank’s system is that a broker can produce evidence of research, a requirement for regulated transactions. Those wary of the ‘creep’ of regulation in the specialist finance market have campaigned for regulated habits to be adopted as a form of best practice. Nicola understands that the coming together with FIBA could lead to this level of due
diligence being more widely carried out in bridging, for example. This evidence (usually produced at the point when an intermediary is ready to transact) adds a layer of intel that Knowledge Bank has into what brokers search and, subsequently, “plump” for. Reflecting on the strength of Knowledge Bank’s team going into the new year, Nicola is proud to have had relative ease recruiting of late, with several applicants specifically seeking out opportunities at the company. “They’ve heard that it’s a great place to work and, although I’m somewhat biased, yes, I think it is,” she laughs. “The culture and the team we’ve got—it’s just brilliant. It’s fun and energetic. Everyone’s so passionate.” Aside from the tech department, they have all worked as a broker, at a lender or in compliance. Initially, that was accidental, but Nicola has come to realise that this perspective is exactly what’s right for the business. “These are the people we want because they really understand what brokers are up against, what they want and what they need. I think that’s perhaps why we’re able to react so fast—and in the right way.” She makes a good point: sharing a background with the people they’re serving means that they truly get it. In case you thought Nicola had had enough excitement for the foreseeable—there’s more. Knowledge Bank is developing a feature that aims to provide a solution for a common musing a broker may have when it isn’t immediately obvious which route to take with a deal: ‘This is a really good case; a lender should be doing this.’ The broker may choose to be notified through the portal if there is a change to the available criteria that will allow the deal to be placed. This is what Nicola calls the ‘notify me’ option. On the flip side, there is also the ability to notify lenders, triggering a discussion about the case, based on the fact that it sits outside their current, published appetite. Users will be able to have this ‘conversation’ with multiple providers at once, and lenders can actively pursue deals that they deem worth a closer look. Once again, Nicola is excited to play a part in a practicable solution. This time, it’s finding homes for deals that may previously have been cast aside, putting the power back into communication and giving lenders the opportunity to respond creatively and display the flexibility they’re known for. We can’t wait.
15 Jan/Feb 2021
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Prop in conversation
How a comparison site is changing the narrative
p
When news of another sourcing slash comparison platform launching in the bridging and commercial market came across our desks in November last year, I’ll be honest, I rolled my eyes. Various iterations of this type of system have been unveiled, to varying degrees of success, and changed relatively little about how we do business. However, I had to admit that I was a) impressed visually by the Propp website, and b) eager to challenge the founders on what exactly they’re bringing to the table. So, I arranged to talk to Peter Williams, CEO; Paul Elliott, managing director; and Ben Larkin, chief technical officer in early January—almost six weeks after Propp had gone live—to get a better sense of what they are trying to achieve and how they plan to do it. Promising to improve choice, costs and timescales for borrowers is a bold claim but this ambition, it turns out, is reinforced by a genuine desire to raise the bar for the benefit of brokers, lenders and, most importantly, consumers. I was careful to get some assurances that their noble aspirations would not eventually dissipate, and all we’d be left with is another lead generation tool. The team surprised me with their willingness to put their money where their mouths are—once the site gains enough traction to constitute a reliable source of data, that is. The introduction of a Propp ‘score’ will serve to hold lenders to account when it comes to SLAs, as will the insistence that providers who are part of Propp adhere to the standards set out. They are brimming with ideas that may drive the market into a new era of transparency, proving that this platform is more than just a pretty face.
Words by
caron schreuder
Interview
Peter Williams: Ben and I were directors and founders of Simply Finance, which we set up 16 years ago, and built over a 10-year period from a couple of us to, at its peak, about 62 staff, before we sold it to John Charcol. That was predominantly a mortgage brokerage. Paul was one of our senior directors and ran the sales department. When we sold, we became directors of John Charcol for 18 months. I ran the Southampton office and looked after its sales team, as well as the one in London. Ben generally looked after the marketing division and compliance, and Paul was running… I won’t steal Paul’s thunder—he can tell you his bit… In that period, we also set up Simply Loans, which was mainly a bridging and secured loans department that fed off leads coming through via the John Charcol network. So, our background is in mortgage broking; it isn’t technology. Ben is, I would say, the techie, out of the three of us. Well, he’s definitely the techie. Paul’s sort of in between. I’m not the greatest technology guy in the world—I listen to these two. Ben and I have been partners for the last 20 years across a number of different businesses that we’ve built and sold. Paul Elliott: I’ve been in the industry since 1999 as a broker. I worked with Ben and Pete originally in the early 2000s, at a firm in Southampton. Then I went off and ran a small brokerage with a friend for six years. We decided to close the doors on that at the end of 2009, mid-credit crisis, at which point I came on board with Ben and Pete. We created a specialist team in 2012 because we could see the BTL market was really starting to take off, then that evolved into secured loans, bridging and specialist finance, which is one of the key assets that John Charcol was looking at with Simply Finance when they bought it. When Ben and Pete left Charcol, I took over the Southampton office for a short period of time, then decided that I wanted a change of scenery. So, I went to work with Ying Tan at Dynamo as a mortgage manager. One of my primary roles there was looking after country-wide auction houses, so I would make the trip up the motorway to Liverpool and stand up and talk about how you should leverage rather than put all your cash into property, that type of thing. I was with them for 18 months, before Ben and Peter approached me and told me about the plans for Timsco, now Propp, and wanted me to help develop that proposition. I joined in October 2019. Ben Larkin: As Pete said, he and I have been business partners for many years.
We enjoy splitting roles based on what we’re passionate about and what we’ve got skills in. I tend to look after IT, marketing and risk. We’ve worked in traditional and specialist broking, and also in wealth management, giving us diverse experience across regulated and unregulated business. Pete can give the background as to why Propp even exists. PW: This isn’t just an old wives’ tale— this is a true story as to what actually happened. A friend of mine, an electrician, wanted to buy his own commercial building for his firm, and he came to me to do it. And I said, “Look, my personal opinion is you want to be speaking to your existing bank to see whether they’re going to offer you something, because it’d be nice and easy and straightforward.” He banked with NatWest, tried to get through to them and couldn’t. Then, when he did, he was given a quote, but had nowhere to compare it against others. Everywhere he went he couldn’t get a comparison quote for a commercial mortgage, without going to another broker. So, he searched the web, put his details in all over the place, and got inundated with unwanted phone calls; he was just trying to get a quotation. He came back to me and said, “This is a pain in the backside, Pete. I just want to know whether what I’ve been offered by NatWest Commercial is good or not?” Basically, the idea was born from there. A consumer or investor wants to be able to check out their finances before they put an offer on a property. What we’ve done with Propp is put the power back in consumers’ hands to say, ‘If you don’t want to speak to people’—as you may not want to at that early stage—‘and you just want to run some numbers, you can do so without having to be pestered by brokers.’ It also gives them the control and the freedom to play around as and when they want to. We make it clear that it might not be the exact quotation, but it’s a high-level one. We’re trying to build trust in the Propp brand so that they can then come back at a later date, once they’ve found somewhere and they’re further down the funnel, and need to speak to a broker. BL: Regardless of whether we’re dealing with our bank or a broker, as an end user, we’re used to being able to compare prices online. People want that reassurance of, ‘Why have I been told this? Is this the right deal for me?’ And, certainly, we have seen examples of what we believe is obvious bias towards some lenders by brokers, which we don’t believe is always in the best interests of that client. We are about driving transparency, removing bias, 20
Bridging & Commercial
but also encouraging competition for the benefit of everybody. If there’s greater transparency, then you have a market which is more open, and consumers become more aware of what’s available to them, increasing the likelihood of obtaining that sort of finance. Caron Schreuder: I would think that with everything that happened due to the pandemic, it is a fitting time for something like this to come to market, given that a lot of those relationships were disrupted. Several of the ‘middle-tier’ lenders have got a lot to offer, but they weren’t really getting a look in before. I presume you’re hoping to expand on that? PW: Yes, take a prime example of a lender like Allica Bank. Numerous high street banks pulled out of the commercial market and you couldn’t get those loans for love nor money. And some of those customers have never heard of Allica Bank. This particular tool gives those providers a bit of a platform. I just want to touch on something that Ben said about bias. Going back to my friend, he did speak to another broker and got quoted a specialist lender at 5.5%. That was the advice given by the specialist broker, when he actually had NatWest, a high street bank, that would do it at 3%. That particular broker, it turns out, didn’t have access to NatWest, because they weren’t part of the requisite trade body. As a result, my friend, if he hadn’t spoken to me, would have been paying 2.5% extra on a commercial mortgage that he shouldn’t have had to. CS: When did the planning for Propp start and how long was the journey until launch last year? PW: Feels like a hundred years. BL: Time is very strange at the moment, isn’t it? PE: Yes. I don’t even remember what year we’re in. PW: We were due to go live in March last year. [laughter] It was being launched as Timsco, but we felt that wasn’t the right name from a marketing perspective for what we’re trying to achieve. So we used the excuse of Covid to basically rip up the branding and start again. The site was still being built in the background, so that didn’t really change. It was mid-August by the time we actually decided to finally settle on what we’ve gone for. The site itself, the core function behind the site, has been ready for over a year.
“We have seen examples of what we believe is obvious bias towards some lenders by brokers, which we don’t believe is always in the best interests of that client”
Ben Larkin
“We’re adding some soft facts about our experience in dealing with the lenders . . . all of the other things that can sometimes make the difference between whether a deal goes ahead or not—it’s not always just price driven”
Paul Elliott
Interview
CS: There are quite a few of this type of platform present in the market; how does Propp differ? PE: Some feedback we’ve had from lenders that are working with these platforms is that ours is not trying to automate the entire process. We understand that the specialist market still requires specialist advice; you sometimes needs consultants to think outside the box. We’re using the technology of the platform to provide efficiencies that, in turn, allow us to spend the time really working the deals through to get the best overall proposition for the client—and making sure that when we’re sending something to a lender, it has been sensechecked. One of the complaints we’ve had from some providers regarding other platforms is that they’re just getting sent enquiry after enquiry that doesn’t meet their criteria. Without naming names, I used one where I tried to get a quote for a bridging loan; it took me through a decision tree and told me that a pre-paid credit card would probably be the best way to go. You can over-complicate the process by trying to embrace technology. However, if you know how to leverage it in the right way, you can bring efficiencies, drive timescales down, and encourage competition, but still have someone there who’s using common sense to make sure the lender’s getting the business that they want and the client is getting the outcome that they want. We’re not a tech company; we’re not using this as another arm to our business—this is what our business is going to be. BL: With most other platforms, you have to provide your personal details before you can progress. And that’s a simple differentiator for us, which is indicative of our approach. We’ve been brokers for many years, so we’ve had to adapt our mindset to focus purely and simply on the end user’s experience—whether that’s using tech to enhance the way we work, or pushing lenders to try to be more efficient in terms of how they interact with us to speed up the process for the benefit of the client. We’re not trying to reinvent the wheel; we don’t need to. We’re techenabled, rather than a fintech proposition. PW: And there’s only a couple of incumbent platforms that are what we would class as direct to consumer. We’re not saying that we want to be a packager; just that you don’t have to go through a traditional, old-fashioned specialist broker that wants to see you face-to-face, that only has access to 10 lenders, that wants
everything done on paper. That’s not where we’re at. There was an article, I think published by B&C, saying that it was taking 52 days to complete a bridging loan from start to finish—which is true when the case is in. But that doesn’t include the time before it hits the broker. So, if you speak to a client today, by the time you meet with them, do your fact finding, your due diligence, sourcing, all of the work that goes on behind the scenes, it’s another few weeks on top. Then you’ve got to get all the documentation together—more weeks. Our system allows us to do that all with speed. CS: All of this sounds wonderful in theory, but how has the launch gone? What sort of feedback have you received from lenders and users? What have you learnt in the past six weeks? PE: Talking specifically about the bridging market, because that’s where we’ve seen most of our traffic, the key feedback we’ve had from the lenders that are bought into the process is that they like the idea of competing. We were unsure over whether using the words ‘get lenders competing for your business’ was a bit too aggressive, but they are rising to the challenge. From a consumer perspective, they like the transparency of the way in which we’re presenting the data to them. [Paul shares his screen so that we can view a sample of how they’re collating data internally using Salesforce. It indicates the published rate, Propp’s optimised rate (more on this later) and overall costs for a selection of lenders that ‘matched’ with the deal.] How do we get lenders to commit to the turnaround times we’ve set out? Well, we manage this by using KPIs. If they’re not responding, we’re going to track that, and we’ll have those conversations with them. So we’re building this out for the client to say, ‘Here you go, here are the lenders that have an appetite for this business; these are the costs.’ And then we’re adding some soft facts about our experience in dealing with the lenders: how quick they are, what their ancillary costs are, whether they are doing AVMs, if they do dual representation etc. All of the other things that can sometimes make the difference between whether a deal goes ahead or not. It’s not always just price driven. CS: What are the fields, at this point, that are actually being fed back to the borrower in their report? The user interface, without electing for the optimised service, shows a certain degree
of the rates- and fees-related info, but exactly how much detail is included in the optimisation report in addition to that? PE: I just want to explain more about why we’ve gone down the route we’ve chosen so far. Our experience is that, for most of our investors and property professionals, the first thing they want to know is, ‘How much is it going to cost me?’ Or, ‘What deal can I get?’ Once they can see the deals then it’s like, ‘Okay, tell me a bit more about that company.’ But, internally, we’re providing feedback to users about our experience of dealing with that lender. What we’re going to build as we get more traffic is just standard KPIs for the lenders. Whether this is the term we’ll use or not, I don’t know, but it will be a Propp ‘score’, similar to that of Trustpilot, which will give a visual on what it’s like to deal with this company. We consulted with some lenders before we launched and made it clear that that’s the way we want to push this, so that it’s not just always going to be who can drive the price down the lowest. CS: This is something I think the market is crying out for. There are obvious commercial reasons as to why it hasn’t been done before, and I can’t wait to see how and when you manage to implement it.We have noticed that approaching lending rate first has not always resulted in the best outcomes, but pricing is still constantly shoved down our throats. Do you think you could potentially change that narrative by putting other parameters—the KPIs—to the fore, in addition to rates, so that when someone looks at it, even at the outset, they have more to base an initial decision on? PE: Yes, I think so, definitely. PW: On our current lead table of rates, there will be a separate section on the right-hand side that will show our Propp rating. The reason we haven’t done this yet is because we’re a new business, and wouldn’t be using trusted data if we did it straight away. We’ve decided to hold off for six months; the mechanics behind it is already done. PE: If you’re working with too small a pool of data, it skews the figures too much. Statistically, it’s not going to be a fair representation for the lenders. If you do a regulated fact find, you ask what the most important things to the client are. We can absolutely build that into the initial question set. Once we’ve got enough data, a user will be able to filter
23 Jan/Feb 2021
Interview
that speed is the most important thing, or flexibility, or whatever it might be. CS: Without being too aggressive about it, it is important to hold lenders to account as we reach a stage of maturity in the bridging market. It’s about time that everyone levelled up a bit, without inviting the regulator in. Something like this will play a role in setting standards— you’re not going to want to be the one at the bottom of the league table. BL: A phrase we regularly use is, ‘Act as though you are regulated’. The encouraging thing from lenders is that they’ve come back and said, ‘We agree. We don’t feel that business is always being placed where it should be.’ On the whole, people are open to, as you say, being held to account. CS: Yes. They’re ready for it. BL: And that includes brokers. CS: From a technological point of view, what exactly sits behind the platform? Is it proprietary or off-the-shelf? Can you expand on that a bit? PW: It’s like KFC, Colonel Sanders. You can’t reveal your secret recipe. [laughter] BL: The back-end sourcing and criteria engine is entirely proprietary. One of the key differentiators is that it’s a piece of tech that’s managed actively by people who are broking within the market. It’s not built by techies, and that’s often where so-called fintech plays fall down—they’re too far removed from the actual day job. The optimisation process enables us to collate the data from an enquiry, quickly refine it, then fire it off to as many relevant lenders as possible in a matter of minutes. And then, as Paul’s shown you, it has the ability to collate those responses into a simple table. The reason we’ve chosen Salesforce is because it offers the greatest opportunity for adding plug-ins to quickly enhance what we’re doing—the obvious and simple things like electronic identification, secure document upload and electronic signatures. For us, it’s about pulling it all into one place that makes it slick and easy for the consumer, and saves ourselves time and money—which means that we can be more competitive from a charging perspective. Development finance is something we’ll look to add to the site this year. Most of our clients are landlords, so they’re asking for BTL solutions. Really, we’re focusing on specialist BTL rather than your
incidental landlord, but we’ll see some enhancements to the website adding other products in 2021. CS: You mentioned that Propp is designed to be B2C; do you mind if brokers use it? PE: No. PW: Can’t stop them. PE: Interestingly, when the PR launch went out, we started getting phone calls from brokers saying, ‘We like the look of the site, but this isn’t our area of speciality—can we talk about introductions?’ So, if anything, it’s raised awareness within the broker community that there is a specialist firm out there that is trying to offer a very transparent service to customers. And, if you’re a broker that values your client, you want them to get the best service possible. Like Pete said, we’re certainly not looking to build up a packaging arm, but if there are introductions to be made, then we’re happy to look after customers for brokers. BL: What is somewhat unexpected is the amount of lenders’ BDMs or product teams who are using the site. It just shows the need for a tool like this. PW: Before, we were always getting BDMs asking, ‘What’s so-and-so doing? What rate are they at?’ And you sort of think, well, you should know this because that’s your competitor. But they don’t, because lenders don’t like publicising any of it, and there are a few lenders that don’t publish rates. But they do on here. We can add and remove people from the panel whenever we like. If we wanted to put every single lender in the country on there, we could. BL: Caron, we call bullshit on lenders who say, ‘We don’t have a rate card— every single deal’s bespoke.’ Propp goes live and it gets a bit of press. All of a sudden, someone’s miraculously managed to come up with a rate card. Funny that. CS: I’ve been talking to Nicola Firth, who also features in this issue, about Knowledge Bank, which is more of a membership-type structure and model, but not vastly different from your platform. How does the commercial side work for you? How are you monetising this? PW: We don’t make any money. [laughter] No. If a consumer goes directly to our website, just plays around with the table, 24
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and doesn’t optimise, we don’t make any money at all. We don’t mind that. I think there are a lot of systems out there that are obviously putting in details like name, email and phone number early on because they can monetise and keep the data forever. We’re not doing that. We make our money like any other real broker does—when the deal completes. If they take our quote, and go direct, we don’t make a penny. That’s probably not our archetypal customer anyway. We’re here to support the investor who would like us to negotiate on their behalf to try to get them a better rate, who sees the value in a broker but wants to use technology as a way of embracing that. There are obviously other product lines that we can look at, and other areas that we can make money from in the future, which we will be exploring. But things like charging a lender to come on panel, we don’t do that. Lenders have to offer something different to the consumer or to our proposition in order to join. CS: The optimised rate that you negotiate, is that exclusive to you? For example, if someone goes through the whole optimisation process, then goes straight to the lender and says, ‘I can get 0.65% instead of 0.7%, will you give that to me direct?’ How is that managed? What assurances do you have that that rate is yours to offer? PW: We don’t have an exclusive. We would like to think that the lenders wouldn’t do that, but it could happen. The value we give is that we will package up and put that deal to the lender in the best possible light compared to what the client will do. And I don’t think if you go direct to the lenders that the person who picks up the phone will have as much leeway as we would. We haven’t seen it happen yet. We’ve actually had it the other way, where they’ve gone to lenders and been given a higher rate than what we’ve been offered. Certain customers that are going direct are causing themselves a bit of a problem. CS: Is the fact that you are specialists and able to get deals through with lenders something that you are pushing alongside the optimisation of the rate, specifically? PE: From our years of experience as brokers, what we’ve learnt is the value when things don’t go right. A really good client of mine put it very well when he said, “That’s when they earn their money.” If we’re being transparent, driving competition, making the application process easy, taking all the paperwork off
“The long-term pay for us is to build a brand that’s recognised and trusted, and will be the go-to place for any investor, landlord or property transaction in the country . . . if that means early on we don’t make a huge amount of money because everybody’s just using it and not optimising, then that’s fine. Because it’s giving us what we wanted in the first place, which is pure transparency and control back to the consumer”
Peter Williams
Interview
you, and driving that lender to get that application through, why would you go direct? We’re looking for customers that understand the value of using professionals who know the market.
looking at a broad range of criteria. Do we have lenders that will do land with planning? Do we have lenders that will do commercial second charges? We are trying to get a good spread.
BL: This still isn’t a market where you want to try to drill into every single element of criteria upfront. We don’t want to give the end user a massive range of options that they end up filtering, and get no results, which, incidentally, doesn’t mean they can’t borrow the money. If they do go through the optimisation process, we are there not as a barrier; rather, we’re trying to enhance what they’re doing. If we can understand the bigger picture, there may be a better way for them to do it that’s more financially lucrative.
CS: Would it be fair to say that it’s a curated list of lenders that offer the breadth of what the average person might need?
CS: How many lenders do you have on the platform right now? PE: Good question. We’re at 52 across both product ranges. CS: And is there a certain number that you’re aiming for? PE: No, I’m very keen not to put a number on it. It’s about what they bring in terms of service, credibility, product range. Does it add anything to what’s already out there in the market? If you end up showing 300 results, a client is going to be like, ‘Well, who do I go with?’ CS: They’re in a worse position than when they started. PE: Yes. BL: We turn lenders away because we know they’re not actually lending. CS: What other factors would result in a lender not being able to join? PE: In addition to our previous experience with them, we’re looking more closely at their funding lines, particularly [over] the next three to six months; I think it’s very important. And then we’re looking at their flexibility and what it’s like to deal with them. Do we feel that they understand what we’re trying to do? Have they bought into it? Can they meet the deadline of the 24-hour turnaround? Some of those already signed up have said, “Here’s a specialist distribution group email that we have set up. We’ve got eight people who are monitoring it, so if someone is out on the road it’s definitely going to be picked up.” Those are the types of lenders we want to work with. And then it’s just
PE: Yes, that’s a good way to put it. One of the things that I’m eager to be able to use the system for over the coming months and years is to identify niches. If we start to see some trends, we can then go to the lenders and say, ‘Here’s an opportunity for you.’ And if they’re not doing it, we go out and find other lenders that are, and make sure that they come onto the system. CS: Will regulated products be included at some point? BL: Yes. The obvious decision, for speed, simplicity, product disclosure and risk management, was to launch with unregulated products only. But we do plan to roll out regulated. The consumers don’t really look at a deal and consider whether it’s regulated or unregulated anyway, so it takes some thinking about how to position those products to the end consumer without confusing the situation. CS: That doesn’t actually form part of the initial fact find? PE: We’ve got a standardised question in the optimisation process: ‘Have you or do you intend to live in it?’ So, we are identifying it when we receive the data, then adding an advice set into it at that stage. CS: So, will you deal with that enquiry anyway, but separately, as part of your offering as Propp? PW: Yes, we’re fully regulated and authorised to provide regulated products. There will be an on-screen pop-up saying: ‘This is now a regulated product; please call this number, or one of our qualified advisers will give you a call.’ All of our advisers are fully CeMAP qualified. CS: Let’s talk about some of the claims you’ve made. The choice aspect we’ve covered. How are you measuring the time- and cost-saving aspects, and are you looking to communicate progress on these to the market on a regular basis?
26 Bridging & Commercial
BL: The statement that we’re saving time is purely based on how long it takes, from our own experience, to manually write an email request to 20 lenders and collate the responses. That doesn’t need to be based on any ongoing data; the system has a proven time saving. Through the optimisation process, we use hard data to come up with the actual saving that each consumer would make on average. We compare what they applied for or initially enquired about, the product that was on offer from that lender, with the rate they can obtain via the optimisation process to calculate this saving on an annualised basis, based on the average loan size. At the moment the average loan is probably a bit higher. As the site gets indexed, we think it will likely drop, which is fine. But it has to be data driven—any claim that we make, we have to back it up. CS: How are you measuring the success of the site? Is it according to the number of enquiries placed, the number of optimisations sent out, or the number of deals completed? PW: Site interactions. We have a business target; obviously we’re here to make money. If, say, we’re making a little bit of money and it’s going absolutely gung-ho and the users are getting everything they need, we’re happy, because the longterm pay for us is to build a brand that’s recognised and trusted, and will be the go-to place for any investor, landlord or property transaction in the country. Now, it might take a number of years for us to achieve that, and if that means early on we don’t make a huge amount of money because everybody’s just using it and not optimising, then that’s fine. Because it’s giving us what we wanted in the first place, which is pure transparency and control back to the consumer. PE: One of the metrics that Ben has been monitoring is how long a user spends on the site and how interactive they are. We want to make sure that stays at a good level and, if we see it dip, we want to understand what we’re doing wrong. Where are our traffic lights, as it were, that are stopping the process from moving forward? There are two very different aspects to it: traffic and the stickiness on the site. BL: Yes, average session duration is between two and three minutes, depending on what type of PR and traffic we get. It varies. And we’re quite happy with that. Obviously it’s key that it’s maintained at a fairly long period of time
Interview
because then we know they’re using the system for what it’s intended. PW: We’re already seeing a good trend of returning customers, so they’re obviously playing around, having a look at numbers, going away, coming back a few days later and playing around again. CS: We’ve spoken a lot about the data aspect and what you’ll be able to pull from the site when you’ve got enough to work with. Do you have plans to release this information into the public domain via the press, with the view to raising standards? PW: Yes. We’re not worried about disrupting. There are too many lenders and brokers that aren’t doing it the way it should be done, and therefore giving this industry a bad reputation. CS: That’s music to our ears because these things always seem to start in a very noble manner but, sorry to be cynical, eventually that tends to fall by the wayside... Finally, what are your individual thoughts on the year ahead? PW: I think if you’d asked a week ago [ed: we spoke just a few days after the third national lockdown was announced], the question and answer would have been slightly different, but we have had a good chat about it over the last couple of days and agreed that, in the short term, from a bridging perspective, we’re going to see lenders looking in a lot more detail at the shortterm exit deals—the three- to six-month ones, especially with sale of property as the exit. I think they’ll be a little bit more cautious on that and we might see slightly longer bridging terms being offered. We’ve already had, in the last couple of days, some lenders asking quite a few more questions about the exit plan, and the ‘what ifs’, particularly around the development side of things. I think that in the first three months of the year we’re going to get a lot of regulated bridging and chain breaks. The market in 2021 is going to go in waves; that’s my opinion. Early on, it’s going to be regulated bridging. I’d like to see commercial come back—commercial term, as opposed to commercial bridging. There are certain cases out there that I just cannot believe lenders won’t fund. CS: It’s all being tarred with the same brush in that part of the market. PW: Yes. And it’s not right. You’ve got cases where it’s an experienced landlord with loads of money and security in
the background, and tenants that have still been paying for the last 18 months during the worst possible time. So, I’d like to think that the commercial market will come back—and if it does, there’s huge demand. We want lenders to come back, but come back properly. So, again, this is us calling out lenders to a degree, because some are saying they’re lending, but they’re not. They’ve got marketing products out there but they’re not lending. PE: Commercial owner occupier— we’re just screaming out for that to come back to some sort of normality. The frustrating thing is that, for the last nine months, there’s been talk about supporting businesses and trying to get everyone through this, and the government have done a huge amount to help, but I think they should be putting more pressure on lenders to do their bit to support these companies. They’re doing it through CBILS and BBLS, but in property transactions we need to get back. I had a conversation with a lender before Christmas: they’re in the commercial term space and have really aggressive plans to get out there, but they’re being hamstrung by having to focus on doing CBILS. PW: Do I think development finance will grow? Yes, I think it will. We’re going to get a lot more of the smaller builders doing what I would call ‘tart and turns’. PE: The exciting thing for me is the change to planning, particularly PDR and the repurposing of some of our high streets. There are people with a lot more experience and understanding than me who are talking about the opportunity this creates to really change the dynamic of these areas. We’re in an era of retail going online, and that’s really been accelerated by Covid. So we’ve got to think about how we change some high streets, and this planning allows more residential conversions. We know there are lenders that want to fund these deals for the right people and when the right proposition comes along. So, that can really start to inject some life back into the specialist market. I think we really need to see how we can innovate through technology a bit more. Can we get some sort of consensus among lenders about adopting standardised forms, for example? Will that help to improve the process? It’s been tried in the regulated market and has been relatively successful. Can we start pushing that conversation? Starting with our panel, can we find a standardised way that works for all of them?
PW: All lenders ask the same questions on their application forms, don’t they..? BL: Regarding the changing shape of landlords—the incidental or accidental ones—and the full impact of taxation changes on them, especially those that now are pushed into a higher rate as a result of the rental income—we’ll see them leave the market. Whereas, for professional landlords, what happens at the end of furlough to the housing sector? Those investors are looking to gear up and I think they believe there’s going to be opportunity this year. And that could see a knock-on effect in bridging or other specialist lending areas trying to gear up, too. For me, it’s uncertain times. As Pete said, ‘waves’ is probably a good analogy for how we’ll see it. CS: Waves is better than stagnation. BL: We’re eternal optimists, so yes. PW: I cannot see there being stagnation. I just cannot see it. CS: No, me neither. In spite of how we’ve started the year, I think what we went through in 2020 will make for a much better market moving forward. It’s really stress-tested those that needed it. PE: Well, if you look at where the bridging space was pre-2008, to where it was 2010/2012… CS: Unrecognisable. PE: Yes, unrecognisable. It pushed out a lot of lenders that didn’t have the right models. We’ve already seen some of the P2P lenders, that just didn’t have a particularly great model, fall by the wayside. Out of anything like this you get those green shoots—you build a stronger foundation. And we want to be there to make sure those lenders that are ready to lend when we come out of this have the platform to be able to put their wares out for all to see. BL: We are keen to work with lenders or other technology partners to improve things, not just for our users and process, but for the market in general. We’re not altruists, but we know that progress should improve things for everyone.
27 Jan/Feb 2021
People
Words by
caron schreuder
Entering a new age for the workforce The seismic shifts to our working patterns and methods last year caused a shake-up in almost every industry. But how have these impacted hiring strategies? I spoke to several specialist recruiters in our sector to get a sense of the evolution thus far, and of the outlook for 2021. It turns out that our greatest challenges may have nothing to do with Covid-19, and have been intensifying for some time
T
he pandemic has undoubtedly been monumental for accelerating progress, but the recruitment world has been steadily evolving over the past five years or so. I asked experts in the field—all of whom assist clients in the banking, lending, broking and wider finance markets, across an array of product areas— to detail what had been happening prior to 2020.
The increased competition to the banks, led by emerging challengers and lenders, has been a gamechanger, in that job seekers now have far more choice than ever before. “The recruitment process often has to focus a lot more on the candidates’ experience and really selling the opportunity to them,” explains Katie Bowles, director at Fintellect. “It’s much more 50/50 than it was five-plus years ago.” Another consequence of the rise in options 29 Jan/Feb 2021
People
Less reliance on commutability as a defining factor of candidate suitability, due to the considerable rise in WFH, translates into a narrowing of the North/South divide and a general widening of available talent is represented in applicants’ motivating factors. Katie reports that there is now more of a focus on progression and career growth, possibly as a result of the prospects that abound at start-ups, compared with what was a typical move from one mainstream bank to another. This sentiment is echoed by James Warburton, managing director at James Warburton Associates, who has, over the past decade, witnessed a decrease in what he calls ‘job-for-life’ recruits, in favour of those who are willing to move in pursuit of developing their career. Ian Reseigh, managing director at Pure Resourcing Ltd Windsor, has watched social media expand the meaning of what it is to be ‘switched on’ as a recruiter. He considers using these platforms a must for sourcing talent and targeting clients. “Recruitment has never been a nine-tofive profession, especially if you want to capture the prime candidates,” he says, “but now more than ever, it can be a
24-hours-a-day, seven-days-a-week job.” For employers, social media can also provide an additional window into someone’s personality and possible fit within the company. The surge in online recruitment solutions in recent years means that people can apply and search for multiple roles with ease. “It is essential that you stand out from the crowd when you are looking to attract the best people to your business,” states Nick Wilcox, director at Valorem Partners, pointing out that, in the face of the burgeoning job site market, working with a specialist partner is “critical” to achieving a firm’s hiring objectives.
The Covid-19 effect
In a word: technology. The vast majority of placements since March have taken place virtually, with only a handful reported to have retained an element of face-toface in the process, according to our panel of specialists. Although the use of video conferencing has been on the 30
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People
rise for a while, 2020 kicked it into overdrive—it was responsible for keeping recruitment activity alive in an industry which, fortunately, still had a need for it.
There are still those who are undecided about the ultimate validity of WFH. Kerry Stephens, director at KFS Recruitment, relays that, for some prospective hires, the need for a team to “bounce off ” is strong, and that certain employers are not in favour of relinquishing control when it comes to KPIs and being able to provide immediate, hands-on guidance and motivation. Interestingly, she makes the distinction between the larger banks, some of which have enjoyed success as a result of remote working (specifically for more administrative roles) and those smaller lenders whose processes and technological capabilities are perhaps less advanced, and which have struggled to translate their sales culture to suit WFH. “I expect, going forward, that more flexibility will be needed in the market and the clients who cannot provide this will struggle to employ the elite talent,” Kerry suggests, especially as she is finding that recruits are placing flexibility towards the top of their lists when changing jobs—sometimes even over income.
This embracing en masse of tech-enabled hiring has made it faster, saving time for both candidates and employers; with remote screening and interviewing, there’s less diary coordination, and far more people can be seen and met. “The age of mass engagement with the likes of Zoom and Teams for interviewing purposes has been hugely advantageous to the efficiency of the processes,” claims Stuart Hicks, group managing director at City & Capital Group. “It has allowed companies and candidates to act quickly and, because of this, has also facilitated additional steps if and where beneficial, without protracting the conclusion to offer.” He has noticed that some clients are able to sufficiently ascertain professional credentials and interest in those first web-based interviews and are taking the opportunity in a final in-person stage to really get to know them better—something that could surely improve the stickiness of placements in future. City & Capital has only one or two clients that have yet to return to relatively normal activity levels when it comes to recruiting.
While acknowledging that remote working has opened up the candidate pool, Katie is of the opinion that it will be short-lived. “I think once we have been out of this situation for, say, 12 months (we can dream!) it will feel a distant memory and we will easily slip back into the ways of office working.”
Onboarding new people has also been supported by technology, as many of those hired during the pandemic may have not yet had the opportunity to meet their colleagues in person. Avadhesh Dixit, chief human resources officer at Acuity Knowledge Partners, believes that we have entered a new age of workplaces and workforces. “Almost all parts of the employee lifecycle— for example, training, recruiting, onboarding and even separation—are now managed by hybrid processes.”
What employers are looking for now
Amid all of this change, are the attributes that businesses seek shifting accordingly? In contrast to the established, mainstream banks, Katie observes that “people fit and attitude” are increasingly important to newer, specialist firms, due to the significant stage of growth many of them are in. “Candidates need to be more entrepreneurial and have the attitude of wanting to get stuck in and help a business develop without multiple teams taking the control of smaller disciplines.” Ian agrees. His clients place emphasis on a positive, proactive mindset and, with less personal contact in place right now, these soft skills “have never been more in demand”.
Less reliance on commutability as a defining factor of candidate suitability, due to the considerable rise in WFH, translates into a narrowing of the North/South divide and a general widening of available talent—an aspect that recruiters have already seen having an overwhelmingly positive impact. “A good example of this is underwriting specialists,” says Stuart, explaining that, for a role that has historically been very much office based, the requirement to work from home has boosted confidence that it can be done, without compromising on quality or efficiency. “Underwriters are perhaps less transient than BDMs,” he continues. “Genuine experience and talent are precious commodities in terms of true credit risk expertise and, often when we are engaged to fill an underwriting role, the available pool in the locality of our client is small. This is not a lack of talent, but more a shortage of those with a reason to move on if they are happy in their existing role.”
“The emphasis is now on sourcing people who are very self-motivated and able to work productively and efficiently on their own, either as part of a flexible working arrangement or WFH full time,” Nick states. While it has always been crucial, trustworthiness is another of these less tangible qualities that is not as ‘earned’ as it once was. “Nowadays, clients are having to trust new employees from day one to work autonomously from home with technology that belongs to the company and expect them to be able to achieve the same results,” Kerry says. “This is very different from how the market was in 2019, when flexibility or home working would primarily be given to those in the company who had proved themselves over time.”
Nick welcomes the opportunity to source the best people for the job, regardless of location, and has witnessed far fewer hiring requirements insist that recruits ‘must be commutable to head office’.
Remote working has reduced the efficacy of training somewhat and resulted in employers increasingly desiring candidates who are technically capable, claims Kerry. “It is harder for clients to fill in the gaps in a WFH situation. More emphasis is therefore applied to experience in the exact role, over potential for the future. Trust, loyalty and the ability to think for yourself are all traits that
According to Ian, the demand for flexible working— which he thinks is here to stay—has been around for years, with many companies previously reluctant to adopt it. “Covid-19 has forced their hand, with the results being extremely positive in most cases,” he states. 31
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clients are actively seeking, as managing a team from afield is notoriously harder and more time consuming.”
“One might argue that this is easier for larger and more established firms with greater time and resource.”
Stuart maintains that cultural requirements from employers are largely unchanged, but he has identified an elevated need for a proven track record of performance—assurance that the person they are hiring can indeed meet the necessary objectives. “I do believe that this causes issues in other areas that should and will be addressed over the coming years,” he posits.
The lack of overall supply can be partially attributed to fewer recruits arriving naturally from banking backgrounds, which has been an extremely useful source of talent over the past 10 years. “You may argue that the migration has plateaued to a degree as the larger banks’ reluctance to engage in riskier property deals has simply meant that the amount of available talent is smaller,” Stuart comments. “Perhaps those that have not made their way into the specialist space never will.” He goes on to propose that the industry’s growth has possibly reduced the original requirement to look outside, owing to how many more people are now active in it. Stuart claims that he rarely sees those who have had a taste of the excitement and complex nature of the specialist finance move back into tier one banking, thus keeping viable candidates in the immediate market.
Ballooning salaries
One of the concerns that Stuart is referring to is the notable increase in average salaries for certain roles within specialist finance—and the need to remedy it. The exponential growth of the sector has meant that there are more opportunities for candidates, creating a “merry-go-round” that is fuelling the hike in remuneration. If employers are unwilling to compete in this regard, they will need to consider recruits from different backgrounds, or look to develop from within the business, sometimes even across role types. Yet, as recruitment firms’ clients place industryspecific knowledge and connections at the top of their wish lists, it becomes requisite to source from within the sector. This means that these people are likely already employed by similar businesses and a premium is sometimes levied to ‘extract’ them. “This makes it a candidate-led market for pricing and slowly drives up the average cost for each role,” Stuart remarks. I ask Katie about the wider impact this might have on the market, particularly in how it affects newer or smaller lenders who want the right people but can’t reach the heights of what it costs to get them. “Some businesses spend months recruiting and waiting for the right candidates because they can’t afford the ones they would initially go for. So, they either wait for an opportune moment like someone being made redundant or end up going for a slightly different profile,” she explains, “all of which will impact business targets and their success.” Ian remarks on the effect that the fast-moving sector has on the necessary resources related to promoting from within. “Due to the competitive nature of the market, many clients don’t have the time to train junior staff and rely on hunting down the best and most experienced candidates with a track record of success and delivery to fulfil their requirements. Unfortunately, this inflates salaries and drives cost.” Is there a way to rebalance this inflation? Stuart believes that training for those with the right personality traits and willingness to learn will “increase rather than churn the talent in our space”. These ‘outside’ hires will often accept a lower starting salary since their sector knowledge is yet to be developed. Difficult, possibly, at a time when mentoring opportunities are not what they once were, given our distance from one another. “This cannot happen overnight, of course, but in time it will mean that lenders and brokers are able to employ from a wider, cheaper pool,” he adds.
It appears important to tackle the pay problem now before starters, who have gained more experience in a couple of years’ time, begin to demand higher salaries that are not achievable, and employers haven’t devised a “plan B for internal hires to step up”, as Kerry puts it. “There is definitely not enough focus on training new talent. This will be an increasing problem over 2021/2022 as companies are struggling to hire the most experienced individuals to try to keep service levels up,” she affirms. For his part, James tells me that employers are recognising this need and are investing considerable amounts of time and money on the training of new entrants and the upskilling and/or promotion of existing staff. Aside from the impact on remuneration, Nick urges businesses not to neglect other potential upsides to expanding their search to other parts of financial services where skills are transferable. “Having a focus on bringing the next generation of people into our sector is absolutely key. As most people tend to move within similar roles and companies, attracting those from other areas of financial services can really give your business the edge and contribute to creating extremely diverse, inspired, creative and productive teams that will ensure your business remains competitive or gains an advantage.”
Diversity and ‘blind’ recruiting
I am curious as to where diversity fits in, given how dynamic recruitment has become. “It is something that is becoming increasingly important to a lot of our clients and remains an issue within commercial finance; roughly 25% of sales individuals are female, which is still really behind where it needs to be,” Katie comments. Age is also a factor that she foresees becoming a concern in the future, based on the number of people, particularly in sales, who are in the latter years of their careers and the relative shortage of those joining the sector. She attributes this to a reduction in training programmes and academies. “This is something that I think lenders need to think about implementing over the next few years to make sure that the talent pool is sustained.”
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“Some businesses spend months recruiting and waiting for the right candidates because they can’t afford the ones they would initially go for. So, they either wait for an opportune moment like someone being made redundant or end up going for a slightly different profile” 33
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“Training for those with the right personality traits and willingness to learn will increase rather than churn the talent in our space” James’ experience signals progress: his team has placed numerous women in senior roles recently. He also commends the calibre of young people entering. “We have been particularly impressed with the number of younger candidates (often graduates, but not always) who are climbing the career ladder quickly and securing big roles—and then delivering against their objectives to a high standard once in situ.”
other sectors he has worked in, “ours is progressive and inclusive—something we should be proud of ”.
Does ‘blind’ recruiting—whereby the applicants’ identifying details are withheld during the earlier parts of the process—have a place in our market? According to those I spoke to, it is starting to take hold with some employers. While recruiters pride themselves on thoroughly getting to know potential hires, making it very difficult to obscure certain information during application, it is realistic that the shortlist could be introduced to the employer on a blind basis. “It would typically be something we would pass on to our clients as opposed to us using that method ourselves,” Katie expands. “Specialist and commercial finance is an area where a lot of people know each other and our recruitment is primarily through referral and our networks, which makes doing it blind impossible.” Currently, just one of her clients requests this. She divulges that the key to achieving a diverse team is to identify the groups that a firm is trying to balance then target those people through tailored strategies—part of a proprietary diversity consultancy service that Fintellect offers. City & Capital will not accept role briefs that contain preferences towards age, sex or any other aspect not relevant to the vacancy, but Stuart also admits that the in-depth interview process makes it unviable to make blind selections. “As we choose to work with a smaller client base, this means that we can be selective in terms of the companies we represent. This due diligence has assured that we are only working with firms that actively recruit without bias. It is the prevention, rather than the cure method for us,” he stipulates. He is of the opinion that, compared with
James, who has “a small proportion” of clients who recruit anonymously, warns of a bottleneck that can be created due to duplicate CVs being submitted, and asserts the need for merit to remain the top priority. “It is important to ensure that, while figures are moving in the ‘right direction’, we do not positively discriminate when hiring, and ensure the right person gets the job based on their attitude and experience.” Candidates reapplying for roles that they may have previously been unsuitable for can also present a problem when attempting to anonymise part of the process. Kerry believes that bias has decreased “significantly” over the past decade and does not consider it to be prevalent in today’s market. There are other ways to encourage impartiality. Valorem Partners incorporates The GC Index®, an organimetric tool that measures the potential impact of a person in a company, as part of its method. This can go some way to assessing candidates on a level that has nothing to do with identifying factors—or skills for that matter. “This ensures that our clients remove subjectivity and implicit bias from the hiring process as exceptional talent shines through,” Nick enthuses. I agree with the recruiters’ message that the attention on training and education has diminished over the past 10 years, and that we are at risk of continuing to churn talent, rather than inviting new people in. If this results in competition drying up due to a lack of available high-quality people, it will be a disservice to customers. This year heralds the opportunity for businesses to reposition themselves when it comes to the sustainability of their recruitment and growth plans—I hope they grasp it with both hands.
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SC R A M B L E THE S
emi-commercial loans are in the spotlight as brokers try to find funding for clients making the most of stamp duty changes. But their efforts are being hampered by Covid’s impact on the high street. Brokers are clambering to place semi-commercial loans, with a spike in demand due to the stamp duty break and a scarcity of products, as lenders fight shy of Covid-hit sectors. One investor saw their stamp duty bill slashed by £12,000 after HMRC issued a clarification that buyers of mixed-use buildings do not have to pay the normal 3% surcharge on BTL properties. For commercial buildings, there is no stamp duty on the first £150,000, with the next £100,000 taxed at 2%, rising to 5% over £250,000. But what should have been a boom for brokers has proved a double-edged sword due to lenders’ concerns over the impact of the pandemic on commercial rents in retail and hospitality. In some cases, they are only taking into account the residential income in their affordability assessments, ignoring the commercial element. Others will only consider businesses that have performed well during the crisis, such as corner shops and takeaways. The situation has seen brokers struggling to meet requests, with ‘semi-commercial properties’ coming up as the top search term on Knowledge Bank’s activity tracker in December.
Big saving
Simon Das, managing director at broker 978 Bridging, says semi-commercial lending, including commercial conversions, currently accounts for roughly half of their completed business—and that the stamp duty clarification is definitely a factor. “A couple of [our] clients are looking for residential assets with a small commercial element for that very reason and, as long as they are buying at the right price, they make a decent saving on the stamp duty [and] enhance their strategy. There’s one instance where the stamp duty bill went from £13,000 down to around £800.” Bridging is currently easier to secure than mainstream loans, making the exit strategy even more critical than usual, Simon continues. “A lot more lenders will do a semi-commercial bridge than a decent term product on that property. Generally, they exit onto a commercial mortgage. If the client can leave 40% equity in the deal and only look for 60% LTV from the mortgage, there is a healthy marketplace.” However, he warns that a lot of term lenders will look only at residential income at present. “Many are saying they want the commercial element to be less than 50% or 25%, of the gross internal area. A number are not taking the commercial element into account at all.”
Changing landscape
“The worst thing for someone to do is get on a bridge they can’t get [out of],” Simon adds. “If they are looking for competitive bridging, the smaller the commercial element compared to residential the better—and just be very mindful of the exit.” He observes that retail is “obviously 36
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FOR not the flavour of the month”. “The landscape of retail is changing and the high street is going to adapt, and we will probably find that independents and businesses that are a little bit more niche might thrive out of it. But, at the moment, the lending market is just being extremely cautious. It’s easier for lenders to say ‘no’ and be done with it.” Typical pricing for term loans that Simon is arranging varies from 4–6% APR, with bridging coming in at between 0.8% and 1.2% per month. Paul Day, business development director at master broker Clever Lending, confirms that both the HMRC move and the issues facing the retail and hospitality sectors have created a surge in demand, as
mainstream lenders have pulled out of the market or tightened their criteria. “Semi-commercial enquiries have definitely increased . . . a lot of lenders are only using the AST element for serviceability and not including the commercial element,” he explains. Obviously that knocks on the serviceability, which then knocks on the maximum loans that lenders are prepared to offer, which affects the number of cases that can complete.” He says semi-commercial term rates are slightly higher than standard BTL levels, but LTVs are much the same, at up to 75% for a good case. One of their keener lenders is offering a 75% LTV, two-year fix at 5.1%. On bridging, LTVs max out at 65%,
but “more realistically” at 60%. Jamie Russell, business development manager at bridging lender Ortus Secured Finance, agrees that the lack of mainstream products in this specific sector probably accounts for much of the increased activity that brokers are seeing. “Lender options for semi-commercial reduced during 2020, meaning brokers need to search harder,” he states. “Indeed, we have built some great new relationships with brokers who have used us for the first time because their usual lender options have withdrawn from the market. We are happy to lend against semi-commercial property. The advantage of working with Ortus is that we understand [it]. Some lenders completely discount the
SEMICOMMERCIAL PRODUCTS Words by
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value and income of the commercial unit, which isn’t how we operate.” Ortus offers short-term loans of up to three years, with a minimum loan size of £100,000. Rates are from 0.65% per month, with LTVs of up to 65%. Brian Rubins, executive chairman at Alternative Bridging Corporation, which offers both bridging and term loans, observes that high street lenders are getting tougher on affordability before they will consider refinancing. “I think the huge driving trend in everything is that the exit via mainstream longterm finance is taking longer,” he says. “Vendors don’t want to wait, and I do see an increase in short-term lending to satisfy that market. The good thing about commercial and semicommercial is it tends to be a more professional borrower and they are easier to deal with. I would like all our borrowers to be really sharp, on the ball and asking the right questions.”
Proof of income stability
Where lenders do take into account the commercial element, corner shops and takeaways are firm favourites, having seen a big boost in business due to Covid restrictions. Paul notes that if it’s a micropub or in the hospitality sector, Clever Lending won’t include it unless they can prove it’s Covidproof. “It’s very much on a case-bycase basis at the moment,” he adds. Further to this, Jamie says that a particular pitfall is often the quality of the commercial element. “Many semi-commercial properties have small retail elements which are let on weak covenants or struggle with profitability. This makes the exit strategy difficult as mainstream lenders need to see a level of income in order to lend. Semi-commercial properties can be a good way to gain a better yield from a property, but this comes with greater risk as the commercial element can be more volatile.” When looking at a this type of asset, how much is classed as residential or commercial depends on the percentage in value and/or floorspace of each component, Jamie explains. “If a property is 90% residential, then there is understandably a lesser emphasis placed on the tenant covenant or trading performance of the commercial element. The benefit of a semi-commercial over a wholly commercial property is that the risk of the commercial part could be offset by the safer residential part. This may be a contributing factor to their popularity.”
“MANY SEMICOMMERCIAL PROPERTIES HAVE SMALL RETAIL ELEMENTS WHICH ARE LET ON WEAK COVENANTS OR STRUGGLE WITH PROFITABILITY. THIS MAKES THE EXIT STRATEGY DIFFICULT AS MAINSTREAM LENDERS NEED TO SEE A LEVEL OF INCOME IN ORDER TO LEND”
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New products
Not all mainstream lenders are avoiding semi-commercial, however. For example, YBS Commercial Mortgages launched a new product for the sector last month. “We’ve taken a slightly more relaxed view on retail than some of our competitors who have said they are not going to entertain any [of it]. We’ve made a distinction between essential and non-essential retail in our lending policies,” says Mike Davies, head of business development at YBS Commercial Mortgages. He adds that the move is not specifically in response to the tax break, but rather a desire to update its proposition. The new offering has a minimum loan size of £400,000, but it will take the commercial element into account, subject to restrictions on non-essential retail affected by Covid, such as gyms, cafés, bars and restaurants. “It’s probably no secret in the market that we have fairly stringent underwriting criteria,” Mike acknowledges. “The quality of the underlying asset is absolutely crucial for us, and then what the revenue streams are like—who the residents are and what their connection to the property is—are obviously an important part of that. “Anything in the entertainment and leisure sector is a challenge for us, similarly pubs and restaurants—those used to be sectors we were pretty strong in. The hope is that [as the vaccine is rolled out] and we start to see some elements of normality in the market, we will be able to go back into [those areas], but , at launch, I think the most common deal we are likely to see is [for] essential retail operation.” Mike explains that the minimum deal size is down to resources. “We’ve got a relatively small team at the moment— we are planning to grow, but we need to manage our ability to deliver. We increased our broker panel from 23 at the start of last year to 127 now, which has generated a lot of interest, as has our product range. So, to make sure our lending teams aren’t swamped with lots of deals, we’ve put that limit in. It would have been a real detriment to our service if we had [offered] a lower floor. As the market levels out, we expect a change in our risk criteria and that will enable us to write some more semi-commercial for the non-essential elements when they come back into scope.” The new YBS interest-only semicommercial product offers an initial fiveyear fix at 4.7%, with LTVs of up to 70%. Specialist lender InterBay Commercial, part of OneSavings Bank (OSB), has
Trends
also launched a new semi-commercial offering. “We all know there is still demand for BTL; it’s been a very good market. Couple that with the commercial premises below and they tend to be [well performing] properties,” says Adrian Moloney, group sales director at OSB. “We are pleased with the demand we’ve seen for this proposition. We’ve taken a very planned, structured approach to launching products. We did the same with semi-commercial—we thought it was the right time to use our expertise to start taking commercial income [into account],” he notes. “We’ve been specific on the type of asset we will lend on: commercial and semi-commercial; suburban and neighbourhood precincts; offices; takeaway restaurants; and cafés and pharmacies.” Adrian states that InterBay will continue to look at those that can demonstrate they have been trading via takeaways. InterBay offers a two-year, threeyear or five-year fix with rates ranging from 4.79% to 5.79%, and up to 70% LTV on a minimum loan size of £150,000. Loans are repayment or interest only, and owner-occupiers are now being considered.
Looking ahead
No one can be sure when the Covidinduced nightmare on the high street will end, but end it will—and for the savvy BTL investor, there are potential bargains to be had. This ultimately means good news for the brokers and lenders serving that market. As Simon puts forth: “Hopefully the service provided during these challenging times proves to our clients that we are adaptable and ambitious and are ready to support them in the good times, too. Specialist brokers open up a new world and greater opportunities and I’m sure that many new customers will remain loyal. “Following the last recession, the alternative finance sector boomed, adapting where the high street couldn’t. We’re here to stay and this adversity will only make us and our client relationships stronger. Here’s to a challenging but very bright future.”
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Explained
Images: Click Above
O
n 1st August 2020, the government introduced a new permitted development right (PDR) to enable more homes to be built on top of buildings without the need for the usual planning permission. The PDR allows the construction of up to two additional storeys to create new dwellinghouses above a purpose-built, detached block of flats. There are some exclusions, however. These include the existing building being less than three storeys in height; the building being constructed before July 1948 or after March 2018; and it being located within a conservation area (or similar). In July last year, airspace developer Click Above saw a three-fold surge in enquiries from freeholders looking to realise the value of the space above their existing investments since the government confirmed the PDR would be coming into effect. It claimed this heralded an “exciting new dawn” for airspace development and its potential to contribute significantly to housing supply. In a recent poll by our sister publication Development Finance Today, around twothirds of developer respondents reported that they would be looking to use the new PDR rules, either somewhat or a lot, for future opportunities. However, while this type of development may sound simple, there are many things
to take into account. “The existence of a new PDR doesn’t drive an increase in consequential development, and allowing two-storey upward extensions doesn’t mean they are by definition the right mode of development across the board,” points out Hinesh Chawda, director at development company Life Less Ordinary. “The key is that any PDR should only exist to deliver a positive outcome while meeting a genuine need and delivering a quality end product.” This is why we have teamed up with multiple experts in the field (or air) to find out what needs to be considered for this type of project and uncover the main myths that circulate around them. #1 Airspace developments can be constructed above any building Unfortunately, the notion of convincing an owner to sell the space above their existing building to create immediate value is not true. There are factors to consider. Can the building actually support the proposed development? Is the roof strong enough for the new unit to sit on? Do you need to add stairs or lift cores? What is the impact of increased occupancy in a low or non-residential area? “The PDR is not as clean-cut as envisaged, and the number of qualifying blocks is considerably less than people think,” states Laith Mubarak, acquisitions director at Click Above. The suitability of the existing building is the most important consideration. “We have seen various parties try to make the model work on social housing schemes but, 42
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economically, these are only likely to stack up with support from councils motivated by a desire to meet housing demand and where the cost of the airspace is minimal,” explains David Kaye, CEO at development lender Puma Property Finance. Developers also need to take into account plans for extending the provision of any existing services to the new development, as well as consider issues such as access, right to light, party wall agreements and legal ownership. “If you have a multi-owned building, the communal areas are owned [by] a different company with specific legal jurisdiction previously agreed before the occupants purchased their flat,” explains Andrew Hall, property director and cofounder of specialist lender CrowdProperty. Changes to this structure will need to be made; this requires all parties to agree to it, and necessitates legal advisers with expertise in this area. “Unless the rooftop has rights to access the communal areas, you can’t legally move forward,” he adds. Furthermore, it also pays to engage insurance brokers familiar with the intricacies surrounding airspace development. “Special care is needed to make sure all aspects and parties involved are insured, particularly as it isn’t your standard building site and the freeholder owns the building below,” David points out. With regard to access, developers must
Explained
Image: Fruition Properties
Image: Hinesh and Rinay Chawda at Life Less Ordinary
ensure they have the ability to get materials to the roof and have enough space around the building for the use of cranes. It is also crucial that the current building infrastructure meets fire regulations and any changes that may come into effect. In July 2020, the government published its draft Building Safety Bill. This set out the biggest reforms to building safety regulation for a generation, and intends to improve building and fire safety following the Grenfell Tower disaster in 2017. “The proposed fire and means of escape strategy for the extended building is paramount, with a need to examine the provision of smoke lobbies, smoke venting and fire-fighting lifts,” says Mani Khiroya, managing director at boutique developer Fruition Properties. “These are not things that a generalist developer is likely to be aware of.” As this is such a new area of regulation, it could wipe out profit margins for airspace developers if they do not adhere strictly to the rules. Many of the considerations to building upwards create unique cashflow challenges. For example, the city centre location of many suitable sites results in limited and potentially expensive access to the property. Superstructure and foundations may also need to be reviewed, which can be costly and time consuming. This is why high-value buildings in high-density areas are expected to offer the most profitable opportunities,
given the complexities and costs involved. Developers will need to invest in an experienced team and relevant experts, such as structural engineers who play a crucial role in analysing the viability of potential schemes and whether the existing building foundation can take the proposed additional units. Specialist technology is also needed to calculate the extra weight a building can bear and whether an exoskeleton is required— factors that could impact the financial feasibility of a project and the facades of the building. “An expert in airspace development is essential, especially since most existing buildings will not have the necessary loading capacity to support the addition,” notes Steve Wilkie, director at Built & Spaces. Due to the awkward nature of this type of development, many use modular construction, which is generally more expensive than traditional builds. It also requires manufacturing costs to be paid upfront. “Lenders tend to submit funds for things that have been physically built as this mitigates their risk,” says Andrew. “Paying for stuff which is offsite puts lenders off— they cannot get their heads around making payments for [that] which is not visible.” However, this does result in time savings, which will be reflected in reduced interest rates. “Essentially, we build 50% quicker, which means we borrow money for 50% less,” states Laith.
#2 Existing residents will be disturbed “Most of the myths and misconceptions around airspace developments—the mythconceptions, if you will—relate to the fear of inconveniencing the residents of the existing housing,” claims Steve. “Worries about noise, upheaval and disruption during the building process are common, as are concerns that the addition of a new development will reduce the value of their property.” However, the use of modern construction methods means that almost 65% of the project can be completed offsite, which lessens the installation process (a large contributor to on-site noise and traffic) and reduces the inconvenience on the residents who live below. Specialists in the airspace arena will also take the requirements of the existing occupiers on board. “Their needs sit at the heart of every airspace project that we deliver,” confirms Laith. “While the PDR means we’re not obliged to, we will continue to consult with [them], providing [the] chance to raise concerns and the opportunity to actively participate in the process to extend and improve the place they call home.” Individual leaseholders can actually benefit, for example from the general building improvements and enhanced health and safety measures. Mani outlines how his company created additional value when it developed four new apartments above a 1970s residential block in Putney. “As part of the work, we refurbished the existing internal communal areas, facade and windows, along with re-landscaping the gardens and driveway. New cycle and
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bin stores, postboxes and an audiovisual entry system were also provided.” Residents can also save money. As the service charge provisions will need to be tweaked in line with the new development, an additional floor can reduce the overall fees. Mani divulges that the Putney scheme’s residents now share running costs with the owners of the new apartments, which has reduced their annual service rate by 25%. “In addition, airspace development unlocks a windfall value for the existing leaseholders and freeholder, which can often be spent on upgrading the energy performance of the building through refitting tired M&E systems or installing photovoltaic panels and electric vehicle charging points.” #3 Building upwards = quality downwards A common concern around airspace development is that the finished product will look unsightly. Other mistaken beliefs are that they have a temporary ‘portacabin’ feel or are perceived to cause a ‘blot on the landscape’. The source of criticism is sometimes down to the construction methods used, which lead to “visions of prefabrication as per the post-war era”, as Hinesh puts it.Yet, this isn’t true. “Not all airspace development is constructed in this fashion. However, for those that are, the level of quality control that factory-based manufacturing delivers nowadays is second to none and exceeds a lot of domestic compliance measures,” he imparts. The existing building can dictate what approach is taken, with some being better suited to modular installations, panelised construction, traditional build or even a hybrid. So, could this particular PDR result in poor quality housing? A governmentcommissioned report into the quality standard of homes delivered through change-of-use PDR in July 2020 revealed that just 22.1% of units created under the rules met national space standards, compared with 73.4% of those that went through planning permission, based on analysis of PD schemes across 11 LPAs in England. Later in September, housing secretary Robert Jenrick announced that all new homes delivered through PDR in England must meet space standards. The change also builds on reforms to ensure that these homes provide adequate natural light. “Contrary to popular belief, the new PDR does not mean that planning requirements are bypassed,” says Laith. “Our process has not, and will not, change. We will continue to meet and exceed all quality and safety standards—the PDR essentially provides us with an ‘in principle’ agreement to proceed with these projects.”
It is important to note that while airspace projects are permitted, the developer must still apply to the local planning authority for prior approval. This considers transport, highway and air traffic impacts of the scheme; contamination and flooding risks in relation to the building; the external appearance of the property; the impact on the amenity of the existing building and neighbouring premises, including overlooking, privacy and loss of light; and whether the development will affect a protected view. Consequently, a planning specialist can be extremely helpful for this type of project. “The planning committee members may lack experience in assessing the viability of an air rights scheme,” claims Vishal Dixit, head of business development at specialist lender Pivot. “Therefore, it is important to have experienced consultants that can present the case in a clear and concise manner to add credence to a particular application.” In an ever-growing population with a shortage of housing, developing upwards is becoming an increasingly viable solution, especially in more crowded towns and cities where land is scarce. A recent study by Fruition Properties and Knight Frank found that Southwark in London has the potential to deliver over 2,000 new rooftop homes— and that’s just one borough. “Imagine the possibilities across the UK,” Mani says. “The need for more homes is acute and where an opportunity to increase the size or change the purpose of an existing building occurs, it would appear prudent to do so if it creates no adverse effect,” states Laith. Bearing in mind that there is also a dearth of skilled labour, using offsite construction for airspace development means we can speed up housebuilding in a different way. “The sheer nature of this process lends itself perfectly to rooftop development, where new homes can be delivered to site and craned on to the existing building in a matter of days,” says Laith. There is also less chance of the seasonal delays that traditional builds run into. “You wouldn’t build a car outside in the elements, so why not build our homes indoors, too?” questions Mani. However, as Vishal highlights, “building higher and suitable housing do not always go hand in hand.” This is especially the case as populations get older and outdated building stock may not have the relevant infrastructure, such as lifts, in place. “Where the development falls outside PDR, there should be a responsibility on planning committees to make sure any schemes they approve are deemed suitable for the needs in their area,” he remarks. “They should be pushing for sustainable, quality housing which 44
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developers should be delivering. Building control regulations should be tighter to take quality requirements into account.” This also plays into affordability. “Building homes to increase supply is one thing, however, ensuring those homes are aspirational, affordable and located in the areas where they’re most needed is vital too,” says Hinesh. “Life Less Ordinary’s strategy is based on exactly this: the delivery of genuinely affordable, high quality housing for first-time buyers across London and the South East where they’ve so often been unable to get on the first step of the housing ladder.” #4 Airspace doesn’t align with the government’s green revolution Firstly, as this type of development is used in areas that are already developed, it reduces the need to build on greenbelt land—something many want to avoid, for the benefit of nature and beauty. Secondly, the uptake of modern construction methods contributes towards creating environmentally friendly, sustainable housing. The quality control that you get from a factory-based manufacturing process can deliver better energy, sound and insulation standards. Cutting-edge construction using volumetric, structurally insulated panels, insulated concrete framework and timber frame all play their part. “The greater degree of precision which happens in a factory environment results in more airtight dwellings, leading to better environmental performance in the long run,” affirms Mani. “Modular building technology now means we are able to deliver homes quickly and efficiently, minimising onsite disruption to the existing building and waste, as well as providing superior energy efficiency,” says Laith. The component-led system is said to have huge environmental benefits, which can dramatically reduce the amount of waste created during manufacture and building. “While a one-bedroom newbuild house can produce 6.5 tonnes of waste on average, our equivalent property creates just 65kg of waste,” claims Steve. Despite this, the advantages of economies of scale, reduced carbon footprint and improved energy efficiency only become cost effective when building many units. “Realistically, airspace development is likely to be focused around smaller number of units, so the gains may not be as great. However, if everyone used modern methods of construction then, collectively, the impact could be significant,” states Vishal.
Explained #5 It’s easy for developers to raise finance for Airspace developments have historically not always been seen as tangible assets due to the non-traditional security, and this provokes a level of uncertainty from lenders. The refinance market also lacks confidence, with high street lenders traditionally shying away from the asset class. This means that there is an increased need for specialist brokers to find lenders with the relevant appetite and expertise to bridge the gap this year and beyond. “Many lenders, both short-term and mainstream, will not look at things they do not understand,” says Vishal. “Education is crucial in [comprehending] the mechanics of airspace development, as well as grasping the wants and needs of the market, in order to provide better lending solutions in the sector. Mainstream funders have traditionally been uncompromising in their appetite with regard to airspace lending. In order to evolve, they need to be looking at the subject matter more encouragingly and with greater expertise to move the industry forward and thus become more aligned with the government’s push for more housing.” Hinesh agrees that there is still a long way to go in bringing the finance community up to speed. “Overly cautious
credit committees can remain reluctant to fund such projects, largely because of a continued lack of understanding; some high street lenders still view airspace homes as non-standard construction and consequently turn away mortgage applicants; while some lenders have percentage limits on how many units they will lend on in a block, including the existing properties.” However, Hinesh thinks that awareness of airspace development since the new PDR was introduced has grown—and this will only help drive greater understanding, demystify the process, and encourage funding to support this niche. Although this is legally more complicated than a standard brownfield development, lenders should recognise the opportunity and work with those who understand the space. “For non-traditional builds, accreditation programmes such as the Buildoffsite Property Assurance Scheme (BOPAS), will help to encourage lender confidence over the potential risks and issues associated with this burgeoning sector,” Mani predicts. He urges that the industry must come together to highlight and prove the merits of airspace to all stakeholders, whether that be local authorities, funders or end users. “As it becomes more widely understood
and less niche, we will see increased opportunities and availability of solutions, particularly on the lending side,” Mani continues. “However, it remains a technical landscape with many nuances, so should not be assumed to be an easy route.” The experience and calibre of the developer is vital for this type of scheme, due to the complexities involved. “There is also a challenge of scale as, for small developments, the additional work required to meet the structural issues may not make sense for lenders,” highlights David. Vishal adds that the real barrier to the uptake in the advantages offered by the PD changes will stem from the expertise and skill set of the intermediary and lending community. Brokers and funding providers will need to be up to date with current legislation and building regulations to ensure they can back upcoming opportunities. “Knowledge takes time to pervade, so we do not expect an immediate explosion in the space,” he says. “As short-term lenders, we need to ensure we are lending to borrowers who truly understand the process and the risks associated. But, for those that are active in the space and have a strong knowledge base, there will be opportunities in 2021 and beyond for borrowers, intermediaries and lenders alike.”
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Jan/Feb 2021
2021
Cover story
POWER This time last year, we showcased some of our market’s biggest success stories under the age of 35. With most of our efforts focused on managing throughout the pandemic in 2020, we decided to open this year’s Power List to anyone who you believe went above and beyond during one of the worst years of our time. We were overwhelmed with submissions, and it was heart-warming to read the glowing references in support of your peers. We are really pleased with our final selection—40 amazing individuals from a variety of roles and across multiple areas who really went that extra mile to keep the wheels of the market turning. We hope that this will inspire and motivate our sector for the year ahead, and recognise the achievements and innovations, however big or small, that our fantastic industry has made
LIST
Cover story
Polly Taylor-Pullen
Ben Barbanel
Business development at Nivo
Head of debt finance at OakNorth Bank
What they did in 2020 that kept the market moving:
Under Ben’s leadership and guidance, OakNorth’s debt finance team approved over £1.5bn in new loans since March 2020, including over £530m via CBILS and CLBILS. Ben personally joined more than 390 credit committee meetings last year, attending at all hours of the day and night, as well as on bank holidays and weekends so that businesses got access to the capital they needed to survive and thrive. The loans that he has approved with the credit committee have not only helped to provide emergency funding to hundreds of businesses, and, in turn, save thousands of jobs, but enabled countless others to pursue their growth ambitions, which will be vital post-pandemic as we look to repair the economy.
Regarded by multiple individuals as one of the “most impressive” business development managers they have come across and “truly inspiring”, Polly has been relentless and passionate about driving value into the bridging and commercial market. When the pandemic hit, she was instrumental in influencing Nivo’s internal investment in technology features that would help lenders and brokers to deliver products and services to clients digitally. She supported key players in the sector to propel automation and build streamlined onboarding journeys through a secure app to fast-track applications and make products more accessible than ever. In an area full of slow, manual, paper-based processes, she has digitised and simplified them at an incredible pace, ultimately giving customers much easier access to the funds they need. Polly has worked with the likes of Avamore, Hope Capital, Bridging Finance Solutions, UTB, Lightfoots, JMW and Together. With the challenges presented due to Covid-19, technology like this had a great impact in helping deals to continue. Furthermore, from keeping up morale to growing the firm’s headcount, Polly has continuously demonstrated her commitment to the business, as well as financial services.
Why they will be integral to the sector’s recovery and growth in 2021: Polly will support key brands with digitising and improving the customer journey, in addition to increasing completion times and conversion rates. She’s shaping enhancements to the Nivo service which will allow more brokers, lenders and conveyancers to work together across deals faster and safer. Polly hopes not just to help these brands recover, but to come back stronger than before.
What they did in 2020 that kept the market moving:
Jon Cooper Head of mortgage distribution at Aldermore Bank
What they did in 2020 that kept the market moving: Jon helped assist 12,000 mortgage customers on payment holidays; oversaw the redeployment of 150 people to payment holiday roles; placed no staff on furlough and, instead, increased numbers within the team; introduced remote valuations, which allowed for 500 to take place during the first lockdown period; streamlined policy, continued lending while others temporarily withdrew; and saw 89.5% of customers “very happy” with its payment break procedure.
Why they will be integral to the sector’s recovery and growth in 2021: Jon is overseeing Aldermore’s product re-introduction and will continue to support existing customers. This includes consideration for those furloughed, self-employed, with credit issues, or landlords with income shocks. The lender is also introducing an improved bridging finance exit solution to allow customers the option to secure a property before the stamp duty holiday deadline and will be using the Iress and Twenty7Tec broker sourcing systems to allow quicker processing towards DIPs.
Why they will be integral to the sector’s recovery and growth in 2021: OakNorth has heard from many SMEs that, due to the unprecedented nature of the crisis, their banks are unwilling to support them as they are seeing commercial lending as too risky in this climate. As a result, Ben feels even more obligated to help businesses, with an aim to lead the team to provide up to £3bn of new loans this year (dependent on finding the right deals to do). As demonstrated by the £4.6bn OakNorth has lent to date, the positive multiplier of this in terms of job creation, job retention and the addition of new homes, would be substantial.
Managing director at Marlin Corporate Finance
What they did in 2020 that kept the market moving: Paul worked 18–20-hour days from February without any time off to ensure businesses—many of whom were having no luck from their own banks—were supported with funding to get through the pandemic. He obtained CBILS loans, provided advice on accessing grant funding, and used a lot of his free time to offer support to SMEs across the country that were fearful of losing their businesses. For already agreed property deals that lenders had put on hold, Paul negotiated with lenders, solicitors and sellers for his clients to provide extensions and interim facilities until they could be completed. 2020 showed how well respected he is from the business community, where high-level bank executives approached him for advice to assist with their own customers. Paul received many thank you messages from people genuinely grateful for the help he has provided and how he has saved countless businesses from closing. In addition, he put in place over 20 new partnerships with lenders to replace existing ones that had stopped or frozen lending.
Why they will be integral to the sector’s recovery and growth in 2021: This will be Paul’s 20th year in finance, having devoted half of his life already to the industry. He has invested in Marlin’s offices and equipment to makes things as flexible as possible for the staff. He is always assisting not only clients, but banks and lenders with advice on structuring products, and regularly helps new brokers and advisers. He doesn’t say no to anyone who needs help, and gives the same level of service and commitment to his HNW clients as he shows to start-up businesses and first-time property landlords and developers.
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Paul Griffiths
Gavin Diamond Commercial director of bridging at United Trust Bank What they did in 2020 that kept the market moving:
Guy Harrington CEO and founder of Glenhawk What they did in 2020 that kept the market moving: 2020 was a significant year for Glenhawk, with the company securing a £200m funding line from JP Morgan in March. It is now on track to grow its loan book to £200m by the end of 2021. Last year, the company increased employee numbers from 22 to 30, and didn’t furlough any of the team. In the three months between September and November, the lender generated a record £487m of new loan enquiries, following the favourable government stimulus package— including the stamp duty holiday—which has driven borrower interest. As a result, in November, the company launched its first regulated bridging product for borrowers looking to secure finance against their primary residence. It also extended its geographical footprint by making products available to borrowers in Scotland. In December, Glenhawk agreed a £25m mezzanine funding line with global private investment firm Balbec Capital, which will enable it to continue expanding its product suite, market share and growth trajectory.
Why they will be integral to the sector’s recovery and growth in 2021: Glenhawk’s entry into the homeowner loan market will allow the company to accelerate its lending activity in response to unprecedented borrower demand. Glenhawk’s movement into new regions, commitment to fairness and transparency, and support of two global institutions, in a market that has seen established entrants depart as a result of the pandemic, will be even more in demand. Guy has a focus on new offerings this year, with 11 products planned to launch over the next three years.
Matthew Corker Operations director at Knowledge Bank What they did in 2020 that kept the market moving: Matthew collated information from mortgage lenders and used it to write a criteria update email which was sent out multiple times a week. The update, packed with information that brokers needed, included changes to LTVs, product revisions, and even details about Covid-secure valuation procedures. It has been regularly read by over 6,000 brokers and industry professionals. Much of this was completed in his own time.
Why they will be integral to the sector’s recovery and growth in 2021: Matthew will continue to build relationships with lenders. He will make sure that he finds out about both the positive and negative criteria changes in the industry and relay this information to brokers to save them time so they can keep advising.
When lockdown came, UTB’s bridging team honoured its existing pipeline of cases and paid out the funding it had promised, remaining reliable and available at all times. Gavin recognised the need for clarity and transparency in the uncertain market and led with regular broker bulletins about products, criteria changes, professional panel availability and expectations on processing times. He worked with the valuation panel to ensure that the bank always had active national valuation panel coverage when AVMs couldn’t be used, approving the use of drive-by valuations, desktop appraisals, or valuations carried out for other lenders that were no longer lending in order to get deals funded. He also allowed solicitor advice to be provided by electronic means and removed the requirement for wet signatures on most documents. Under his leadership, the team created new efficient processes. ID verification using UTB’s facial recognition app combined with passporting information to dual representation lawyers reduced administration time and removed duplication and the need for face-to-face meetings. Gavin worked tirelessly to get deals approved and paid out in the midst of unparalleled levels of enquiries and demand, even facilitating loans within a couple of days of application. He kept his team engaged and focused with twice-weekly Zoom updates, and motivated and energised them with regular employee social events, including virtual after-work drinks, bingo, whisky tasting, treats delivered to homes of staff, and family ‘big night in’ takeaways. Thanks to Gavin’s direction, UTB has achieved consecutive record months for bridging enquiries received and new loans drawn.
Why they will be integral to the sector’s recovery and growth in 2021: Gavin plans to build on UTB’s existing technology to further simplify the application and underwriting process and to enable brokers to do more on a self-service basis, if they choose to. With new products also on the horizon, the lender’s service and offering are set to shake up the sector.
Cover story
Lenka Pajkošová Head of underwriting at MT Finance What they did in 2020 that kept the market moving: Lenka is widely referred to as the linchpin of MT Finance and, although she’s been with the company since January 2013, 2020 was the year when she really came into her own and proved her mettle. Last year, when others fell away and turned their backs on brokers, MT Finance continued to lend. Not one single offer was pulled, and the part Lenka played was integral to this. Her work ethic is considerable; she is often in the office until past 9pm getting deals over the line. Those who work closely with her, love her. One broker commented that she was “indispensable” and that no task was ever too much trouble. Her wealth of experience in navigating the perfect balance between protecting the company’s interests and being flexible enough to overcome barriers that presented themselves was also highlighted. One colleague described her as “a natural born leader and truly an inspiration to any woman trying to make it in this industry”.
Why they will be integral to the sector’s recovery and growth in 2021: Lenka’s attention to detail and considered approach will be more essential than ever this year. With business likely to be brisk in the first quarter as buyers try to take advantage of the stamp duty holiday, Lenka’s meticulous way of ensuring all service providers, such as valuers and solicitors, perform at the same speed as MT Finance will be crucial. This will mean deals complete in a timely fashion, leaving brokers to concentrate on new business, safe in the knowledge that Lenka has their backs and is looking after them.
Marc Champ
Marieke Eskens
Managing director at Wharf Financial
Head of case management and senior underwriter at Fiduciam
Alex Upton
What they did in 2020 that kept the market moving: Marieke was instrumental in implementing CBILS into Fiduciam’s lending business. She engaged with external service providers and instituted the scheme’s requirements into its usual processes, created new policies and templates and, importantly, trained the team. Parallel to this, Marieke undertook an extensive exercise to allocate additional internal resources to the CBILS team to deal with the large volume of applications. She put in place the necessary infrastructure to ensure all criteria for borrowers could be efficiently and reliably vetted. Marieke is responsible for 15 case managers across numerous countries, and her main challenge was to pull this team together throughout the Covid-19 crisis so that Fiduciam could maintain its normal lending activity. Without her tireless work, Fiduciam would not have coped with the demand it had received for CBILS loans. Similarly, without her enthusiasm and ambition, the lender would not have continued to thrive in all the jurisdictions in which it operates.
Why they will be integral to the sector’s recovery and growth in 2021: Marieke helped Fiduciam become one of the first pure bridging lenders to be accredited by the British Business Bank. This widened the use of bridging loans—particular in the hospitality, education and other sectors very much affected by Covid. This will keep her busy for the first half of 2021. This year, she also intends to start exporting the UK’s bridging expertise into another two European countries. She is pioneering, together with Fiduciam’s UK country head, a completely new client coverage model as an alternative to the traditional BDM-driven route, putting case managers right at the centre of the operation. To be able to achieve this, Over 2020, Fiduciam built up the teams with 16 new employees. Marieke helped put in place the lender’s hiring and training programme, which all new employees were guided through.
Why they will be integral to the sector’s recovery and growth in 2021:
Marc went above and beyond to help clients source the funding they needed for a variety of property projects. He set up Wharf Financial at the beginning of the year, not knowing how 2020 would pan out. Marc’s attitude was that, with confidence in his work ethic and sheer determination to make things happen, he could be a beacon of reliability for his clients. This enabled him to open doors that had seemed non-existent in these troubling times. He has been able to start, build and grow a company while many were faced with impending redundancies, reductions in available cases and financial difficulty. Wharf Financial took on another three brokers in the last quarter, which verifies Marc’s ethos of consistency— striving to be there for his clients and overcome whatever obstacles may be in the way. An apprentice he took on last year commented that he was always looking for ways to push her to learn new things in efficient ways and finding opportunities for her to improve her skills and knowledge. Over the past eight years, Marc has been actively involved in the Green Army Cycling Team and, although most of the fundraising activities were scuppered last year, he became involved with Decade On, a charity that offers mentorships to people from less privileged backgrounds who are looking to break into a certain industry.
Alex is a recognised spokesperson for the industry and very vocal in her support of it. She is driving change at HTB in terms of people and process, with more launches expected this year. Alex is keen to improve and innovate on a day-to-day basis, which motivates her team and the company. This will help the market and brokers with new products to aid recovery and growth. Competition motivates Alex, and the desire to see HTB continue to move to the next level ultimately means its competition also has to improve and innovate, which will help the overall market.
Marc’s values are already deeply embedded in his new company and he is expected to play an integral role in ensuring the market’s recovery this year, using his expertise to help borrowers and lenders navigate the rough road ahead. The brokerage’s strategy includes launching new product offerings; moving into other areas of finance, such as marine, aviation and wealth management; using technology to make the customer’s journey smooth and more time efficient; and raising a specialist fund.
Commercial director at Hampshire Trust Bank What they did in 2020 that kept the market moving:
Nisha Saigal Senior associate of real estate, secured lending and banking at Lawrence Stephens What they did in 2020 that kept the market moving: While navigating nationwide lockdowns and economic turmoil, Nisha closed £31.5m of secured lending transactions at Lawrence Stephens during 2020. with a further £6m mandated to complete in December alone. She has been described as an enthusiastic and personable rising star within the firm, with the likely prospect of becoming partner, and has a passion for both deal making and the law. Last year, Nisha oversaw over 200 instructions for one lender, an unprecedented volume for this time and a testament to her energy and management qualities. With many furloughed in the industry, Nisha—who managed the workload across a team of five—has meaningfully helped to shape and influence a balanced work ethic and culture at the firm. She returned to work in early 2020 from maternity leave, while adjusting to life with two kids under two at home. Her actions and accomplishments are proof to how individuals can champion progress in their industry.
Why they will be integral to the sector’s recovery and growth in 2021: Nisha has specialised in commercial property for 12 years and has spent just over half this time at Lawrence Stephens. Her experience in dealing with varied transactions and developing deep-rooted relationships with a range of contacts in the secured lending industry places both her and the firm in a strong position to navigate ongoing changes to the market dynamics in 2021.
What they did in 2020 that kept the market moving:
Alex was one of the driving forces in keeping HTB open during the first lockdown, which meant that the lender was able to demonstrate flexibility and solidarity with its broker partners, in addition to increasing its market share and reporting some record figures for applications and completions. Alex fought to keep all staff on the road, albeit virtually, throughout the whole of the lockdown. It was important that HTB’s brokers had the full complement of the lender’s new business team to support them when they needed it most—and Alex made sure that happened. Externally, she spearheaded the lender’s communications with the market, making sure its broker partners knew exactly what it was doing and when. She personally spoke to every broker who had a deal in the offer pipeline as at the beginning of lockdown, and worked through each and every one to make sure that the bank could do what was best for the broker and the borrower. The conversations weren’t always easy, but they were clear, and Alex took accountability.
Why they will be integral to the sector’s recovery and growth in 2021:
Cover story
Asim Shirwani CCO at Lendhub What they did in 2020 that kept the market moving: Asim joined Lendhub in the middle of lockdown and soon became a vital cog in the company. Within weeks, he had led the onboarding of five new staff members and provided remote training and development. He filled the void caused by no longer being able to meet and train people in an office environment with multiple daily video calls and generally being available to staff 24/7 to assist with anything and everything. He also further developed the Lendhub product range to ensure it fits the needs of the lender’s brokers and borrowers. Starting with fixed-fee bridging, and with the borrower in mind, Asim worked hard to provide greater clarity when budgeting. He sourced excellent legal and valuation fees so there were no hidden surprises and is already looking at other ways the business can improve other products and services.
Why they will be integral to the sector’s recovery and growth in 2021: Asim’s many years of experience will continue to benefit the future new hires at Lendhub and, in turn, its brokers and borrowers. His attention to detail when reviewing and redesigning products will also ensure that the lender is providing exactly what the market requires.
Faye Wilcox
Chris Field
Managing director at Valorem Partners
Director—head of corporate at Christie Finance
What they did in 2020 that kept the market moving:
What they did in 2020 that kept the market moving:
Faye committed to a journey of improvement, not only within her business but also to raise the standards of the bridging and commercial industry when it comes to recruitment and best practice. This included signing up to the Women in Finance Charter and agreeing to uphold it when providing candidates to her clients, in an effort to support the placement of more senior women in leadership roles. She also introduced The GC Index®—an industry first—as a response to the diversity and inclusion, health and wellbeing, and skills shortage challenges the industry faces. Her aim to help the market make better hiring decisions will hopefully aid companies to thrive during the recovery period and beyond. In December, Faye also launched a health and wellbeing partnership for the benefit of Valorem’s candidates, as well as its clients’ employees and the wider sector.
At the start of the year, Chris was focused on delivering funding options to large, complex HNW companies. When Covid-19 struck, a large proportion of Christie Finance’s team were furloughed, and Chris looked after the existing pipelines of deals, as well as future enquiries in a challenging market. Throughout this time, he demonstrated his willingness to help clients who needed support to not only grow, but to purchase and refinance. Chris— who was described by one person as “an honest, hardworking solution finder”—exceeded targets in 2020, including the successful completion of a number of tricky and sizeable transactions. In his role as the ‘go-to’ broker for hotels and care homes, he secured funding when his clients’ usual sources of debt could not perform. Even once funding offers were issued, Chris carried on supporting transactions and explaining issues and solutions to often frustrated sellers and their advisers in order to help keep deals alive.
Why they will be integral to the sector’s recovery and growth in 2021: Inspiring the next generation is something close to Faye’s heart, and she will explore how she can impact this area further throughout 2021. She is also looking to support various charities that have special meaning for her or have strong ties to our sector. Faye feels it is her duty to give back and looks forward to making future announcements regarding this over the following months. In addition, she has begun recording a dedicated Women In Finance/leadership podcast, on which she will interview inspirational leaders from within the market in order to boost WIF and encourage new talent.
Colin Barrett Mortgage proposition director at OSB Group What they did in 2020 that kept the market moving: In 2020, Colin oversaw the complete process of bringing together a team of people dispersed all around the UK via Webex, in addition to evaluating how to temporarily suspend new applications, have desktop valuations approved and implement system changes, and then restart new products based around restricted capacity and remote processing—all while maintaining a new credit risk policy and not wanting to swamp underwriting. He remained calm, focused and inspirational throughout. On top of this, Colin was quietly engineering the enhancement to Precise Mortgages’ bridging offering, and its recent relaunch and delivery of the semicommercial and commercial products from InterBay. This involved detailed engagement with the group’s credit, underwriting and real estate teams to ensure that it had a suitable proposition to support the broker market.
Why they will be integral to the sector’s recovery and growth in 2021: Colin plans to anticipate the challenges of 2021 and execute a route to success for every eventuality. He will ensure that any required changes are made, while also taking the entire team with him on this journey, so that people don’t feel stressed or out of place.
52 Bridging & Commercial
Why they will be integral to the sector’s recovery and growth in 2021: Chris will be able to use his unrivalled contacts and lender relationships to ensure that he and his team will be able to continue to give clients the best advice possible by working tirelessly to make sure transactions are managed.
Richard Deacon Sales director at Masthaven Bank What they did in 2020 that kept the market moving: Richard helped guide the bank through Covid, and played a role in designing and bringing to life Masthaven’s broker portal—which was a huge success. The business’s strategy was to continue operating without furloughing a single member of staff or making any redundancies. Richard remained consistent with his communication and support, and was available at all times, including evenings and weekends, to answer queries. “Nothing was too much trouble; during a strange year, he really made a difference to our experience of using Masthaven,” declared one broker. “He is the sole reason we go back time after time.” Richard was also said to be “unafraid to tell you changes or decisions … and doesn’t hide behind email and criteria”. One peer described him as always maintaining a positive attitude towards placing broker cases in the tough months when many lenders withdrew from the market, while another claimed that his presence, knowledge and availability—alongside persistent cheerfulness, despite what the world throws at him and our industry—showed “standout excellence”.
Jonathan Sealey CEO at Hope Capital What they did in 2020 that kept the market moving:
Why they will be integral to the sector’s recovery and growth in 2021: Richard and Masthaven are expected to bring consistency to the market this year. His experience, knowledge and understanding are valuable commodities in the challenges that await the industry.
Clare Jupp Director of people development at Brightstar Financial and Sirius Property Finance What they did in 2020 that kept the market moving: Clare continually supported the growth and development of Brightstar, helping with the personal transition of sales support staff into consultant roles, aiding more young people into the sector and developing new opportunities for them. She also remained a passionate advocate for the Women in Finance Charter and the wider agenda of raising the profile and involvement of women in key roles in the industry. She wrote for numerous trade publications on the importance of employers caring about the mental health of their staff. She was also engaged with seminars and webinars with industry partners, including Barclays, to increase awareness of the people development agenda within the sector, especially during a time when many were in new workplace settings, such as their home. Clare supported numerous businesses in sharing good practices born out of projects and programmes that she has launched at Brightstar and Sirius. This was provided for free and it has helped to inspire many businesses to look at how they can improve and refine their own procedures. Beyond this, Clare led the process that saw Brightstar Financial once again top The Sunday Times Best Small Companies to Work For list.
Why they will be integral to the sector’s recovery and growth in 2021: Clare aims to continue to educate on how to support people, develop new talent within the industry, and focus on raising the profile and engagement of women in the sector, as well as championing a positive work-life balance in favour of the emotional and mental health of people in these most challenging times.
Since Jonathan established Hope Capital in 2011, 2020 has undoubtedly been its most challenging year. However, due to his leadership, decisiveness and compassion, the company continued to grow, with unprecedented demand and enquiries from new brokers and a 272% increase in completions for the 12 months to November compared to the previous year. To ensure the business and market would keep moving, Jonathan introduced flexible, innovative products based around borrower affordability—the Seventies and Custom Collections—and processes to improve efficiency were implemented. The introduction of AVMs and other valuation methods were also pivotal in keeping operations moving through both lockdowns. Hope partnered with Nivo to apply new ID verification and messaging technology, enhancing the customer experience and making underwriting deals more efficient. Furthermore, Jonathan increased the Hope team by 50% last year, with the appointment of seven new members. His commitment to an equal workplace was recognised by the Women in Credit Awards, when Hope won Employer of the Year in November. Jonathan also continued to support charitable causes, including the Sunshine Group, a local organisation supporting women affected by breast cancer.
Why they will be integral to the sector’s recovery and growth in 2021: Going forward, Jonathan will continue to lead the business, push product innovation, develop processes, and ensure Hope delivers unrivalled borrowing solutions with exceptional service—no matter what is happening in the world.
Yasmine Holliday
Daniel Richardson
Business development director at Nucleus Commercial Finance
Partner and property receiver at CG&Co
What they did in 2020 that kept the market moving: Yasmine helped navigate the sales team expertly through the year and overcome a host of challenges. She maintained relationships with Nucleus’s introducer partners, ensuring they stayed engaged by providing them with company and product updates regularly. This resulted in a record volume of submissions in 2020, and has been a huge part of why the business has funded £300m-plus last year to UK SMEs. She has been crucial in organising and hosting training webinars to help intermediaries get to grips with new features within the portal, which has made the submission process simpler and more efficient.
Why they will be integral to the sector’s recovery and growth in 2021: Yasmine’s focus this year will be to ensure the Nucleus introducer base is well aware of new product development and deployment. Her attention will be on developing new business opportunities and re-engaging with its network across the UK. It is through those relationships that the lender is able to provide funds to businesses across the country that need it most. The work she has done last year has increased the volume of referrals, and this is set to continue as brokers place more trust in her and, ultimately, Nucleus to help their clients overcome their financial challenges.
What they did in 2020 that kept the market moving: Daniel has been instrumental in ensuring that a host of lenders have fully recovered problematic loans at the earliest opportunity throughout the pandemic. At a time when many lenders have been hamstrung, he has actively sought alternative ways to ensure that the enforcement process is consistently as far advanced as possible. Despite not being able to arrange face-to-face meetings due to Covid-19 restrictions, Daniel has proactively and successfully engaged with borrowers remotely to agree exits. Working in conjunction with CG&Co’s in-house legal team, he has also scrutinised the rapidly evolving possession and enforcement legislation to maximise lenders’ options. Daniel was also said to have ensured the broadest possible range of property was sold for the optimum price, despite the vagaries of the market.
Why they will be integral to the sector’s recovery and growth in 2021: As the economic fallout from the pandemic continues to unravel, Daniel maintains it will become even more imperative for problematic loans to be returned to lenders as quickly as possible. He’s determined to ensure that lenders are in a position to reuse their own money to lend at rates that are the most advantageous to them, particularly as he anticipates that the cost of new funds will continue increasing. In the final quarter of 2020, Daniel witnessed a growing demand for investment properties and expects this trend to accelerate. He believes that lenders will best be able to cater for this by using their existing finance, so he and his team remain committed to returning default loans to them in the shortest timeframe.
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Alice Williams Director at Pilot Fish What they did in 2020 that kept the market moving:
Martyn Pollock Director at Hallcroft Advisory Limited, part of the Hallcroft Finance Group What they did in 2020 that kept the market moving: Last year, Martyn dedicated a huge amount of time to students. He got in touch with Reading University and learnt that most large corporates had cancelled their summer internships. Martyn saw this as an opportunity to help and Hallcroft took on two interns— something it had not done before. Martyn opened up his diary to these students via Calendly, which they could access to schedule time with him and other members of the team. Entering lockdown, Martyn also came up with a campaign to support SME developers and investors by talking to institutions over MS Teams, Zoom, BlueJeans and Google Hangouts to find out how they would be able to support Hallcroft’s existing clients and whether they would genuinely accept new propositions. One colleague explains that Martyn’s enthusiasm was felt by existing and prospective clients and many have raved about his desire, professionalism, problem solving and can-do attitude.
Why they will be integral to the sector’s recovery and growth in 2021: Martyn’s passion to grow the brokerage is based on ensuring that clients end up with the right lender which will, in the long term, assist with market recovery. The company’s experience has led to it being able to sniff out lenders that are fly-by-nights so that they can be avoided. He and the company believe that if clients are with the right lenders, the growth of SME developers and investors will continue.
Scott Marshall Managing director at Roma Finance What they did in 2020 that kept the market moving: Scott made significant advances in technology within Roma to allow the continuation of lending and growth. Along with his team, he developed a customer-centric, feesfree Covid programme, allowing breathing space for borrowers who experienced issues or a complete halt to their property projects. These implementations allowed the business to expand its distribution routes, increase activity and completions far beyond pre-Covid levels, and provide heightened support to partners, customers and intermediaries.
Why they will be integral to the sector’s recovery and growth in 2021: Scott’s vision for Roma is to put customers at the centre of the process and increase efficiencies to benefit all parties involved. This approach has seen the introduction of a streamlined legal process, improved relationship management, technologies and lending decisions based on the customer and not the property. Together, these factors have directly resulted in better outcomes for all stakeholders and very minimal defaults or repossessions. Scott will carry on empowering his team to make best practice decisions in 2021, and this will help steer Roma, its intermediaries and borrowers to a successful future.
In response to the first lockdown, Alice and her partner, Josh, sought to bring together members of the property industry to educate, motivate and inspire. This resulted in the launch of The Property Conference in May, an online event that gained an overwhelming reaction from leading figures in the industry. So much so, the originally planned 12-hour conference was extended to 36 hours to accommodate all who wanted to take part—and it raised £18,000 for NHS Charities Together. No longer able to attend her regular mentoring events in person, Alice sought an alternative way to arm property investors and developers with knowledge on how to fund their projects. She launched The Pilot Fish Academy in June, which was very successful and continues to attract subscriptions from both new and seasoned developers. In her spare time, Alice completed her CeMAP qualification and continues to work towards her MSc in Real Estate Finance and Investment, and achieving chartered surveyor status.
Why they will be integral to the sector’s recovery and growth in 2021: The Property Conference will be back by popular demand in the spring of 2021. Determined to improve equality within the finance sector, Alice has agreed to visit her former secondary school with a view to inspiring and educating young women about the opportunities a career in finance can offer. She plans to spread this agenda as far and wide as possible this year. In line with the Pilot Fish ethos to engage, inform and support, Alice will be adding courses to The Pilot Fish Academy, as well as providing free weekly finance resources to her subscribers. She will further fulfil her role as a mentor to multiple property masterminds, contribute to several property publications, and continue to back her clients through their finance applications and instil confidence in the lending market.
Tom Frank Managing director at Ice Cubed Property Finance What they did in 2020 that kept the market moving: The theme for Tom from March to July 2020 was “doing whatever it takes”. One client described Tom’s communication skills, willingness to take on difficult conversations, and focus on customer outcome, rather than commission, as key things that made him the exact broker they wanted to have in 2020, and the person they knew would be there through difficult times in the future. Tom and the business’s biggest success of the lockdown period was rescuing and delivering an £18.3m infrastructure bridge for one of their clients with Octopus Real Estate. The brokerage dealt with the logistical issues of getting documents to solicitors’ homes while offices were shut, and collecting original ID in extremely short timeframes. By July 2020, the client was delivered their funding, which ended up being slightly above the facility that failed to materialise in March. Tom has been a developer and a borrower and has personal experience of schemes going wrong, which has given him the insight and skills to help his clients when they face similar issues. By December 2020, the brokerage had arranged over £120m of loans in one of the most challenging 12-month periods in living memory.
Why they will be integral to the sector’s recovery and growth in 2021: This year, Tom is finishing his MSc in Real Estate Investment Finance at Oxford Brookes in a bid to further increase his knowledge and deliver something above the norm to his clients.
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Suparn Sapatnekar Senior credit manager at Octopus Real Estate What they did in 2020 that kept the market moving:
Simon Das Managing director at 978 Bridging What they did in 2020 that kept the market moving: During lockdown, Simon saw the opportunity to make lists of lenders still trading. The company used this time to speak to many lenders and have actively onboarded several new ones, strengthening its offering to clients. Most notably, the brokerage found and built relationships with finance providers that have no extension fees and default interest—a safety net for people who are looking to do conversion and development projects during the pandemic. Simon worked round the clock to ensure existing deals did not fall through and clients were not left in the lurch. Meanwhile, the team completed a skydive that raised £3,000 for local charities, on top of hundreds of pounds raised for international charities through the brokerage’s ‘978’ initiative— for example, 978 days’ worth of grain seeds were donated to children in Malawi. The company also kept hiring throughout the crisis, including three new staff to support ongoing operations.
Why they will be integral to the sector’s recovery and growth in 2021: The brokerage has made it a priority to work with lenders who are able to complete quickly, recognising that lockdown uncertainty is here to stay and can pop up suddenly to slow down a deal. The company has also not shied away from commercial, seeing the importance of these assets for social regeneration and community. Simon will continue to find solutions for complex deals, such as for guesthouses, high street assets and other commercial properties. Meanwhile, one of 978 Bridging’s sister companies is procuring 200 properties for a local housing charity—as such, the brokerage is devising a panel of lenders that are comfortable with social housing landlords. Simon is also currently working with both domestic and overseas investors, bringing much-needed investment to his adopted town of Morecambe. Its regeneration is one of Simon’s passions. There are plans in place to develop a hotel of their own, as well as ambitions for a 3D printing studio. With the North of England struggling after being hit by lockdown restrictions, Simon is keen to improve his local area, as well as build up relationships with his investors.
Last year was one of huge personal sacrifice for Suparn. When Octopus Real Estate opened an office in Manchester, Suparn opted to relocate away from family and friends to help establish the base, the working practices needed to make it successful, and the culture to bring a new team of recruits together. Recognising the diversity by region, he co-hosted a series of roadshows across the North, to really understand the specific dynamics and get to know the valuers and solicitors in these new areas. He was able to change the credit appetite to more accurately reflect the market and champion flexibility and openness in communicating with both borrowers and brokers. He has specifically positioned credit as an essential function to the sales team. By treating sales as an internal customer, he has shown the whole team the power of providing excellent service both externally and internally. This has made a tremendous cultural change within the business and helped lift the team’s spirits during a challenging year.
Why they will be integral to the sector’s recovery and growth in 2021: Suparn has acknowledged the importance of listening to brokers and understanding their needs and ambitions to grow. As a result, he is exploring options for a new technology roadmap that will introduce smoother processes for brokers and end borrowers, removing barriers that cause frustrations and challenges that can slow down transactions. This will be integral to keeping the customer at the heart of everything Octopus does.
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Tiba Raja Executive director at MFS What they did in 2020 that kept the market moving: Tiba was instrumental in the rollout of MFS’s Covid recovery fund, helping those whose lenders had retreated from the market. This was done through various marketing channels so that brokers, clients and investors were confident that they had somewhere to go to access finance to ensure they did not lose their properties. As well as this, Tiba published numerous market updates, informational blogs and property-focused reports to keep the market aware of the current situation and confidence high. These were not just words—they included real-time research of UK homebuyers that reflected the genuine feelings of the country at the time.
Why they will be integral to the sector’s recovery and growth in 2021: Tiba will be instrumental to the market’s recovery due to this continued research and subsequent education of the market. Without it, the sector will not be provided sufficient confidence to recover and grow.
Justin Trowse Sales director of bridging at LendInvest What they did in 2020 that kept the market moving: In April 2020, Justin was promoted from senior BDM to director of bridging finance to take the lead on growing this product line throughout a turbulent period for the industry. Notably, LendInvest celebrated a new record for signed bridging applications in Q3 2020, reporting a 65% year-on-year increase. Justin also led in the business’s CBILS offering and, together with development and structured finance teams, he has steered the way on innovative funding solutions via this scheme. When the second lockdown started, the lender expanded its desktop valuation ability to residential bridging, creating faster turnarounds, a reduced overall cost, and a socially distant environment for both valuers and tenants.
Why they will be integral to the sector’s recovery and growth in 2021: Justin will play a leading role in supporting short-term lending customers in 2021 and guiding the direction and growth of that product in what will become an important year for the industry. Justin is close to the lender’s goal of increasing market share this year with fresh and original products, and addressing the wide range of gaps it sees in the market. He will focus on ensuring LendInvest’s proposition is a firstclass offering that is tailored to the new world we find ourselves in.
Kim McGinley
Jack Medlicott Associate solicitor at MSB Solicitors What they did in 2020 that kept the market moving: In April, Jack was instrumental in the secured lending department, completing on over £10m worth of loans. This took place while MSB, along with lenders, banks and valuers, transitioned to working from home. Upon introduction of the Mercury signing rules by the Land Registry last year, Jack assisted a number of his lender clients in deciding on their approach to the rules and how they would implement new procedures. The changes and advice allowed a lender client to complete a crucial transaction while the borrower was subject to strict lockdown rules on the other side of the world. One lender said that Jack’s experience allowed it to modify its legal requirements during lockdown to ensure that transactions could proceed to completion without delay. His passion for technology also enabled MSB to develop its case management systems internally and integrate directly with the lenders that it works closely with.
Why they will be integral to the sector’s recovery and growth in 2021:
Managing director at VIBE Finance What they did in 2020 that kept the market moving: Kim was described by one colleague as “inspirational” last year after taking on two new full-time staff members and moving into much larger premises. On social media, she has demonstrated a real side to her personality and has further created a true brand in VIBE. A peer highlighted that she has a genuine passion for the industry that they haven’t seen in a while and has achieved so much while having a young family and two businesses (the second she launched during 2020).
Why they will be integral to the sector’s recovery and growth in 2021: Kim will continue to spread a positive attitude in the industry to keep it buoyant. It was noted that she works extremely hard and has a clear goal in taking the business forward.
Jack Coombs Director at Aspen Bridging What they did in 2020 that kept the market moving: Aspen became one of the first lenders to use desktop valuations to circumnavigate the surveying shutdown. On 23rd April, it announced it would lend on pre Covid-19 property values. On 26th May, the business increased its maximum LTV to 75%, raised its top loan amount to £3m net, and said it would use both physical and desktop valuations. In November, the lender confirmed that it had zero loans in default and, in August, September and October, had surpassed its lending targets by over 25%.
Why they will be integral to the sector’s recovery and growth in 2021: Jack has stated that the company will continue to invest in technology to make dealing with the lender as simple as possible, all while increasing the speed from application to completion. Aspen will also be looking to expand product lines and loan amounts. To ensure the business continues to deliver high service levels, it will recruit throughout 2021.
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Jack is driving the firm’s implementation of new procedures and the development of its technology to ensure that its lender clients are market leaders, not only in the products that they are able to offer but how they are able to navigate through the lending and legal process. For many years, there has been a belief that law firms and solicitors delay the progress of transactions—Jack wants to change that narrative by providing clients with a service whereby the bank or lender receives the best possible security to protect their financial position with as little as possible interruption to the business objectives of the parties involved in transactions.
Michelle Dean Senior relationship manager at Peritus Corporate Finance What they did in 2020 that kept the market moving: In January 2020, Michelle was approached by Ruth Hobbs of Property Sisters to talk to a group of 50 like-minded women who were at various stages of their property development/investment journey. Michelle’s presentation concentrated on all viable finance options, and how brokers can assist them to fund their developments. It was such a success that Michelle was asked to present regularly to the group. When the first lockdown began, these face-to-face events quickly moved online and ultimately on to the Property Sisters’ YouTube channel. These short videos became a useful resource and a great opportunity for Michelle to maintain visibility in order to continue to provide a great service to this community.
Why they will be integral to the sector’s recovery and growth in 2021: Activity in the property market isn’t confined to large-scale developers; small firms are just as important in the delivery of new housing stock. Focusing on smaller developers, for example the Property Sisters network—an expanding group of around 500 women at various points on the property path—will enable Michelle to facilitate appropriate funding for this underrepresented sector of the community, all while bringing new developers to the market and helping to increase the supply of habitable housing across the UK throughout 2021 and beyond.
Simon Lindley Chief development officer at Cambridge & Counties Bank What they did in 2020 that kept the market moving: Through Simon’s recommendation, the bank chose not to join the Coronavirus Business Interruption Loan or Bounce Back Loan schemes. Instead, it focused all of its efforts on being open and fully accessible to its brokers and customers throughout the pandemic, to be able to provide traditional finance, not short-term government funding. That gave the bank the opportunity to entrust and develop existing relationships and allowed it to widen its reach and build new connections. From January to November 2020, 461 applications were submitted to the bank, a 77% year-on-year increase. The value of loans approved during this period stood at £261m, a 53% increase on 2019. Some 56 new brokers joined its broker panel last year, with 20 of them added during lockdown. In addition, a total of 805 forbearance requests were managed by Simon’s team between March and November.
Why they will be integral to the sector’s recovery and growth in 2021: Under Simon’s leadership, the bank will remain focused on assisting borrowers in underserved niches and will return to funding in the hospitality and leisure sectors as we start to put Covid-19 behind us. Simon and his team will be reviewing their processes with a view to streamlining them. This will include introducing short-form and repeat loan applications and more flexible delegated authorities, as well as building on and improving the annual review process. He will also look to develop further growth through launching a range of green finance products in 2021, with its first pure electric vehicle finance offering having rolled out in January.
Lucy Barrett Managing director and founder of Vantage Finance What they did in 2020 that kept the market moving: In 2020, Lucy worked relentlessly to make sure her team were well-equipped to help their clients and handle cases while working from home. New processes Lucy introduced while in lockdown made it easier to take on new business—some of it very complex—and all while completing on others, including a £20m loan at 70% LTV on a large portfolio. One of her colleagues noted that she is “an amazing mentor and friend” and was influential in shaping their career, as well as that of countless others within the company. Last year, she was applauded for being on hand 24/7 for any issue, whether it was case-related or not.
Why they will be integral to the sector’s recovery and growth in 2021: Taking on the most complicated deals and bringing them to completion is what Vantage is known for, and this is due to Lucy not being afraid to tackle those that sometimes look impossible.
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Nick Baker
Shane Donnelly
Amy Baptiste
Liam Lawlor
Head of intermediaries at Allica Bank
Director of Northern Ireland at Ortus Secured Finance
Senior paraplanner at LDNfinance
Sales director at Octane Capital
What they did in 2020 that kept the market moving:
What they did in 2020 that kept the market moving:
What they did in 2020 that kept the market moving:
What they did in 2020 that kept the market moving:
Nick maintained an unwavering focus on improving delivery and ensuring Allica remained open to support its intermediaries. He worked closely with both internal members of staff and the market as a whole to find solutions for SMEs of all shapes and sizes, and oversaw the delivery of a number of improvements to Allica’s lending products to serve those finding themselves suddenly without the volume of available lenders they were used to. Allica has been able to provide a highly competitive and much needed product range of commercial loans to key sectors, such as hospitality. An introducer described his commitment and work ethic as “unrivalled”, stressing that he is someone they can trust and rely on.
In 2020, Shane was adamant that commitment to Northern Ireland was more vital than ever. He therefore led a push for further growth in the this market, which included moving the Ortus office to larger premises on May Street in the heart of Belfast; recruiting a Belfast-based marketing manager during the summer in order to better promote its activities and products in Northern Ireland and across the rest of the UK; and writing record-breaking business volumes— including some high-profile schemes— in Northern Ireland. In Q3 and Q4, Ortus saw its busiest periods since establishing its local team in the area.
Amy’s tenacity and appetite for continuous improvement within the specialist property finance space hugely helped to keep the market moving during 2020. Prior to Amy’s employment at LDNfinance, there were virtually no systems in place on the specialist side of the business so, when the pandemic hit, processes became particularly laborious. With Amy’s arrival and insight, she was not afraid to state where LDN—and the wider sector—could improve efficiencies moving forward. These new systems have resultantly revolutionised the brokerage’s back office and improved its capacity and organisation during this tumultuous time.
One broker said that, last year, Liam went above and beyond in order to support his clients and bring solutions to the table, rather than problems. Others added that he has a strong work ethic, is great with people, transparent and always contactable, and that his clients trust his view. Throughout the year, he was said to always be responsive to new enquiries and kept clients updated with new and improved lending criteria (including Octane’s new BTL offering), while his speed of replying to calls and emails was especially noteworthy. Liam helped shape various deals and his advice and insight were described as “invaluable”. His persuasive skills when speaking to credit were said to go a long way in resolving problems.
Why they will be integral to the sector’s recovery and growth in 2021: Nick continues to push forward Allica’s SME lending capability, through ensuring standards remain impeccable across its commercial mortgage offering, and having responsibility for the rollout and delivery of its asset finance proposition, ready to support even more small businesses throughout 2021.
Why they will be integral to the sector’s recovery and growth in 2021: As well as heading up Ortus’s Northern Ireland operation, Shane manages the credit team and is responsible for maintaining a straightforward approval and underwriting process. Looking forward, residential and commercial property investors will need certainty, and Shane will see to it that Ortus will be a lender they can rely on this year.
Why they will be integral to the sector’s recovery and growth in 2021: Amy’s attitude and expertise towards business improvement and planning will be crucial for recovery and market growth this year. Her skill set means that she facilitates LDNfinance to present much better to lenders and ensure that processes are as smooth as can be. In a time when uncertainty is rife and lenders have had to change terms and their capacities to suit, Amy’s role is pivotal in navigating the choppy waters in order to get deals over the line in the easiest and quickest way for the broker, client and lender.
Why they will be integral to the sector’s recovery and growth in 2021: One peer highlighted that Liam is respected by many professionals in the industry and so, on a transactional basis, this gives him the ability to progress deals at pace and with confidence. Given the market we are in, this offers advisers and their clients comfort that his hands-on approach will mean funding can be secured quickly and smoothly.
Jordan McBriar Managing director at Adapt Finance What they did in 2020 that kept the market moving: “Humble yet effective, confident yet listens, and demanding yet appreciative” is how one lender describes Jordan, whose passion to get the right result for his clients was compelling last year. He personally completed in excess of £75m across 68 deals, which involved working with numerous new lenders, as well as completing loans in different sectors, including energy and sustainability. Jordan is said to always be there for his clients; he worked through both lockdowns, making himself available to the entire market for assistance and providing help and guidance to anyone who needed it.
Why they will be integral to the sector’s recovery and growth in 2021: Adapt launched a charitable initiative last year, which included donating 10% of income derived from completed loans to charity. The company intends to make this permanent, and wants its lender partners to consider doing the same. Jordan is also looking at creating a mentoring platform for younger people joining the industry to help create a successful, sustainable business. “We are going to need people like Jordan more than ever during 2021,” one lender said.
Andrew Lazare, founder and managing director of Mint Bridging
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MINT TARGETS QUARTER-OF-ABILLION-POUND LOAN BOOK WITH PLANS FOR REGULATION Words by
BETH FISHER
As part of an ambitious three-year commercial strategy, Mint Bridging aims to grow its loan book to over £250m, and is set to add longer-term loans and regulated mortgages to its offering. The bridging lender’s founder and managing director, Andrew Lazare, discusses how the business intends to reach these goals, why championing the underdogs of the borrower community is key, and how the introduction of product panels will help expand its routes to market
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“SINCE OUR LAUNCH IN 2011, WE HAVE BEEN PROUD TO ENJOY CONSISTENT YEAR-ONYEAR GROWTH, WHICH WE BELIEVE IS A STERLING TESTAMENT TO OUR PEOPLE”
What key opportunities and market gaps will you be looking at in 2021 and why? Mint takes pride in the fact that we immerse ourselves in the market. Our senior team has first-hand experience of all aspects of property finance, be that from the position of borrowing, developing, building, or managing properties; we have an in-depth understanding of the challenges, as well as the opportunities. When looking specifically at prospects in 2021, we firmly believe that our increasing ability to ‘champion the underdog’ will position us well for even further growth. In a changing landscape, traditional lenders are looking for more reassurance in a market where there is, put simply, less. So, as a privately funded lender, our ability to back borrowers and loans that make commercial sense to us in a way that other lenders can’t is a real opportunity for the year ahead. In terms of the type of borrowing that we are gearing ourselves up to do more of, we believe there will be an increasing shift through 2021 towards traditional bridging products. We are already strong in this area and our move towards more specialist teams, the use of title insurance and the employment of new technologies will see us continue to drive down the time period from enquiry to completion to less than a week. How are you evolving the way you work with brokers? We work extremely closely with our brokers and, this year, we will be introducing a number of ways to strengthen those relationships. It’s important for intermediaries and lenders to have a symbiotic relationship; our brokers have a thorough understanding of the Mint product offering, just as we have a proven and established knowledge of their requirements. It’s important that brokers understand the values and USPs of each lender they work with and how they differentiate themselves from the crowd. As a lender, it is our job to equip them with that knowledge. Having continued to lend throughout the pandemic, what were enquiries and completion levels like for you in 2020 compared with 2019, and what lending targets do you have for 2021? Whereas some lenders have been required to press pause during the pandemic, we’ve been pleased to maintain the momentum of our business—with overall enquiries down by less than 1% compared with 2019 and with no sign of slowing down in 2021. While our conversion-to-completed loans slightly reduced as a function of the uncertain economic landscape—
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particularly during the second and third quarters of 2020—overall value of loans has remained strong and continues to rise. Our aspiration prior to the third lockdown was to lend £175m this year in new originations. As you would expect, our initial progress towards that figure will be slower, but we’re confident we can pick that up by the end of the year. How will Mint be innovating in a bid to increase distribution? We have started the new year in an incredibly strong position. Through significant investment in proprietary tools and systems in 2020, we’ve achieved an even better understanding of our commercial relationships and, in turn, further possible routes to market. We have already begun exploring these to drive broader distribution across the sector, and will be introducing a number of new approaches to business this year. These include relationship audits to uncover improved ways of working together with our broader spectrum of partners; regular virtual roadshows to showcase our products and services to partners old and new; and developing a programme of product panels to ensure Mint remains at the forefront of delivering innovative and timely products to the market. All of this is designed to further strengthen our relationships with partners and provide a platform through which to ensure all parties have an in-depth understanding as to the breadth of our products, and also through which to invite essential feedback. It is important for us to listen to them and understand their specific needs. You currently offer novaluation loans, bridging and development finance, second-charge specialist, and refurbishment loans. Where are you currently seeing most demand and why? Last year saw a slight change in our product mix with a minor shift from development to bridging. It’s a pattern we expect to see continue throughout 2021 and beyond, and one that we have already readied the business for in both structural and operational terms. The shift can be put down to several factors, including increased demand for BTL properties and our competitive rates for bridging products. Our no-valuation 60/65% product was really well received in the market, particularly among specialist bridging brokers. There has been a slight reduction in second-charge loans over the past 12 months, but we are expecting to see this recover and grow in 2021 as people seek to raise money for investment purposes from their existing portfolio.
How exactly does the novaluation product work? We were one of the first to bring the novaluation product to market, and it does exactly what it says on the tin. It was born out of our significant experience in lending and sees us deliver an innovative product to a section of the market that needs it. There’s minimal risk. We ensure that we deliver against the tight timescales that our collective clients demand, so when our team are happy with the loan, the comparables and the borrower, we provide a product with no valuation necessary, saving both time and money. What new products can we expect to see from Mint this year? The programme of product panels that we are developing allows us to even better listen and react to the needs of the market. Early fruits of this labour include a number of new offerings that will be launched in the next few months, among them a 100% purchase price loan to allow experienced borrowers to undertake refurbishment works without the need to seek further drawdowns from us. We are also close to launching interest roll-up on some of our products—which means we will be able to offer serviced, deducted and rolledup interest options to our borrowers. How will the business be marketing itself differently this year and why? Since our launch in 2011, we have been proud to enjoy consistent yearon-year growth, which we believe is a sterling testament to our people. As we embark on our next phase of expansion and look to increase our presence in the market, we are pleased to have appointed specialist consultants in the fields of digital marketing, PR and communications, and senior business leadership to support us in our continued growth. We’ll be dialling up our approach to marketing, delivering an efficient and effective integrated sales and marketing strategy that drives further quantifiable commercial return for the business.You can expect to see more of Mint across social media and other digital media channels, as well as in the press.
Mint has recently restructured internally, including new specialist bridging and development underwriting and dedicated completion teams. Who have you hired, why did you decide to do this, and how has it helped the business to lend during uncertain times? We have great commercial ambitions, but we understand that we can only achieve them through the delivery of a fantastic service—this requires us to invest in people. In recent months, we have made several appointments across our senior team, including Amy Brown and Danielle Comer who join our completions department, and Mariela Loján who has been added to our finance team. We have also split our underwriting division by products, so we now have a bridging team and a separate development team, providing bespoke and specialist expertise closer to each deal. Furthermore, we now have a dedicated asset management team, a product-specific legal team, a committed and knowledgeable portfolio management team, and a new completions team. By investing in expertise at every level of our business, we can ensure that all aspects of the loan are dealt with professionally and to the highest standards. Our people are key to Mint’s core business values. We’re extremely proud of our workforce and low staff turnover rate. This further contributes to the high level of personal care Mint’s customers enjoy. Over the next three years, how will Mint be looking to increase the scale of the business and its loan book, and is becoming regulated part of your plans? We have ambitious aims for the future. Over the past 10 years, we’ve been proud to grow to a 45-strong, trusted team, with a loan book exceeding £100m. During the next three years, and through the continued development and expansion of Mint’s proposition and products, our mediumterm commercial objective is to grow our bridging loan book to over £250m. Our three-year commercial strategy focuses on maximising the relationships that we have, introducing new routes to market and, in the next 12–18 months, following approval, introducing a range of regulated products to our portfolio. This will include launching longer-term loans and mortgages. We are proud of the products and services that we bring to the sector. We are now of a size and scale that sees us defining the plans and strategies that will deliver our ‘next level’ growth ambitions—and we look forward to being a more visible and vocal lender in the months and years to come.
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Feature
Turning the tide on the plastic pandemic in construction Not-for-profit company Changing Streams, founded in 2018, is dedicated to reducing plastic in the construction industry. Yet had founder Neal Maxwell not experienced a lifechanging trip to the Arctic, it may never have evolved in the way it has Words by
Martin Morris
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Neal Maxwell, founder of Changing Streams
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eal has been involved in construction for 30 years. After joining Aztec Interiors—a company which delivers creative and cost-effective fit-out, refurbishment and construction solutions—in London in 1986, he relocated to Liverpool in 1988, when he became an equity director of newly established Aztec Interiors (Northern) Ltd, leaving his former MD to look after the business’s interests in the South of England. Neal remains there, as chairman, today. A more recent string added to Neal’s bow has been the founding of Changing Streams CIC, which followed an eyeopening trip on an exploration ship to the Arctic with his wife. He wanted to get closer to nature and the environment, but he wasn’t prepared for the impact of climate change and the plastic pollution he was to see for himself. “Pre-trip, my image of the Arctic was what I had seen in films and magazines: cold, vast, white landscapes and wildlife in abundance. Being there is something quite different, almost spiritual . . . [it] is by far the most beautiful place I have travelled to in my life. You simply cannot appreciate it unless you’ve been there,” Neal says. “Kayaking in the Arctic Ocean is a very special feeling,” he continues. “You become at one with nature and are suddenly highly aware of your surroundings and the environment. Polar bears would watch as we paddled past, while walruses would pop out of the water simply out of curiosity.” However, for Neal, the trip was to prove both enlightening and disturbing. “I was privileged to be able to learn from scientific specialists from all around the world who helped us understand about the impact global warming and plastic pollution was having on the planet,” he states. “I was one of only 10 people able to go out in the kayaks, and each day we would be seeing plastic washing up on the shores of the small islands. We would do everything we could to collect as much as possible, but it was devastating to see what we were doing to this beautiful landscape and its inhabitants.” His epiphany came when he went into a supermarket upon his return. “I didn’t realise just how affected I’d been by the experience. I walked in and froze. It was mile upon mile of plastics lining the shelves and it turned my stomach,” he recounts. “I had to go and sit in the car.” He describes Changing Streams as a community interest company (in partnership with the University of
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Liverpool) whose aim is to reduce plastic use in the construction sector. Having run his own business in that field for over 30 years, for him, it was an obvious place to start. “When I researched the major contribution my industry was actually having on the problem, I knew it was time for action on a global scale.” A 2019 study from supplier Insulation Express highlights that the construction industry generates 50,000 tonnes of plastic packaging waste annually, with 40% (20,000 tonnes) being sent to landfill. It also details how companies can save money simply by reducing their waste. For example, reusing packaging where possible should lead to less time spent on handling waste, such as clearing and collection, which can be both lengthy and pricey. It should also mean being able to slash the cost of skip hire and transport, as well as lowering the everincreasing fees of landfill sites and tax. In a similar vein, the UK government set a target under former prime minister Theresa May of “working towards all plastic packaging placed on the market being recyclable, reusable or compostable by 2025” and eliminating avoidable plastic waste by the end of 2042. That means everyone must play their part. “Brokers need to be aware of the shifting landscape in the market as we head to net zero carbon emissions with government and local government targets. All stakeholders in the built environment will have [a role] in this. You cannot solve the climate crisis unless you address the plastic pandemic,” Neal asserts. Despite a less-than-ambitious target of net zero carbon by 2050, more than 300 local authorities have already taken the initiative by declaring climate emergencies; most of them bringing forward their target dates to as soon as 2030. Yet not only does this require policy change at both industry and government level, it also demands the necessary political will to carry it through. For Neal (and Changing Streams) this entails developing a multifaceted approach, comprising research and data collection, as well as educational engagement and behavioural changes. Changing Streams is aiming to bridge the gap between industry and academia to create a lasting change based on in-depth research and innovation. “We are now building a global community of scientists, manufacturers, developers, finance houses, raw material providers and many more who all share our vision and recognise the importance of collaboration,” Neal reports. He notes that the construction space faces a significant problem, with the most common sources of plastic waste 66
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including “unused materials from overordering and offcuts, improper storage and handling, over-specified project design and workforce packaging and utensils”. The genesis of Changing Streams followed a meeting Neal had with Jonathan Sharples, professor of Ocean Sciences at the University of Liverpool, and a subsequent introduction to Dr Gareth Abrahams from the university’s School of Environmental Science. “Together we started pulling ideas together and put feelers out for others to join us,” he explains. “We got a handful of people involved, and it started to grow from there.” Underpinning Changing Streams’ philosophy is its Charter and membership scheme, which provides access to support from the University of Liverpool and other research establishments for companies looking to reduce their plastic footprints (subject to fees dependent upon extent of work required). It also offers advice to help future-proof and make businesses more profitable through innovation. Members and associates who sign up to the Charter are expected to use their best endeavours to significantly reduce their plastic use, be it in building design, materials or packaging. In effect, “this is a clear commitment from these organisations to reduce the plastic used on any project they finance”, Neal points out. But change has to be driven from the top down. “We are looking for pension funds, REITs, housing associations and large asset owners to embed our Charter within their client requirements document,” he adds. Moreover, “any contractor interested in tendering for work will be obliged to comply with the guidelines of our Charter, otherwise they will not be invited to work on the project. This causes a cascade effect for positive change at every level and picks up the supply chain in the process.” Changing Streams is continuing to develop and deploy interactive tools to support contractors, architects, designers, surveyors and anyone else involved with commissioning buildings, to better understand and identify the extent of plastics as components in building materials and in related functions in the industry. Associated members are encouraged to help support the formation of these tools and use them in their own workplaces as and where possible. Free advice on R&D tax credit schemes, as well as marketing support from being listed and promoted on the company’s website, is also available. Changing Streams’ recently announced partnership with Your Housing Group, which owns more than 28,000 homes across the North West, Yorkshire and the Midlands, is one major example of
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collaboration. Under this arrangement, it will review Your Housing Group’s current processes through a series of workshops, as well as work alongside the company to develop a long-term research and implementation strategy to reduce plastic consumption across its portfolio. Changing Streams is also pursuing research and innovation into the development and use of sustainable alternatives to plastic, which should result in a significant reduction of it, longer term. However, this is still in its infancy and, while early ‘wins’ are achievable, it is not always the case. “Simple swap-outs can be achieved relatively quickly and at low cost, if at any cost at all. More complex areas will need much research, which we will be embarking on,” Neal explains. Easy swaps will typically mean changing fixtures and fittings or reducing the use of plastic wrapping for building materials such as bricks and cladding. More complicated tasks, such as phasing out materials containing plastic, will take much longer. Forming a backdrop to this, the government announced its heavily trailed Green Industrial Revolution in November 2020. Its 10-point plan aims to create and support up to 250,000 highly skilled green jobs across the country, backed by £12bn of government investment. It is also intended to spur over three times as much private sector investment by 2030. A Green Jobs Taskforce to support two million environmentally responsible jobs by 2030 has also recently been unveiled. This includes ensuring the country has the immediate skills needed for building back greener, such as in offshore wind and home retrofitting, as well as supporting workers in high-carbon transitioning sectors, such as oil and gas, to retrain in new eco-friendly technologies. This builds on its existing strategy of promoting non-fossil fuel energy sources, including offshore wind, hydrogen and nuclear. It is also aiming to make homes, schools and hospitals more energy efficient, with a target of installing 600,000 heat pumps annually by 2028, and create 50,000 jobs in this area by 2030. Critics of the government’s green initiatives have been quick to cite them as being vague—and Neal wants to see more meat on the bones, too. “We are already using R&D tax incentives as a tool to release funds and support any research projects but, in addition to this, I’d like to see tax breaks for those companies who are making a demonstrable effort in becoming greener. They could also look at insurance discounts for companies following our Charter,” he proposes. Moreover, while the government’s
‘building back better, greener and faster’ infrastructure strategy (and the role the construction industry has to play in it) may be aspirational, its likely impact is unclear. “We are yet to fully understand how these three aspirations combine in detailed policy proposals and play out in real world projects,” Neal states. “It is fundamental that the term ‘greener’ in this list is used to underpin and qualify the other two. So, building back faster should not be about removing the kinds of mechanisms and processes we need to ensure we are making the most of the opportunities to develop sustainable projects. Perhaps one of the risks in this conceptual combination is that ‘greenness’ will be achieved through a blanket template, like a shopping list of things you need to add into a building design to make it green,” he suggests. “Experience tells us that all buildings are inevitably disparate. They are on different sites, in different parts of the country, have different user requirements, budgets, programmes, and so forth.” But if promoting real change in the construction sector is what Changing Streams is entirely about, this can only come to fruition if all developers “commit to plastic reduction in the same way they are committing to carbon reduction”, Neal claims. “The two are inextricably linked; therefore, it is impossible to have one without the other. To do this we ask developers to join us as members and embed our Charter into their client requirement documentation.” For Neal, that doesn’t simply mean paying lip service to the environmental crisis. “Greenwashing has been well documented, but we need the government to drive change through real action. I’d like to meet with the ministers involved and talk about the practical measures they could put in place.” Ironically, the Covid-19 pandemic has had a positive impact, principally due to the global collective response regarding vaccine development, for example. This can serve as a template for other initiatives, including reducing plastic use. “We need to look at what we have learnt and address the devastating impact of climate change with the same level of urgency and attention,” Neal asserts. Part of the issue, though, is that plastic materials are both versatile and cheap; hence, the road to their reduction, if not eradication, is going to be a long one. While recycling alleviates the problem, it is not the ultimate solution. From a practical standpoint, the available options to convert plastic to fuel do reduce the burden of microplastic pollution, but can result in production
“BROKERS NEED TO BE AWARE OF THE SHIFTING LANDSCAPE IN THE MARKET AS WE HEAD TO NET ZERO CARBON EMISSIONS WITH GOVERNMENT AND LOCAL GOVERNMENT TARGETS” of carbon or carbon dioxide and volatile compounds. “A longer-term solution needs to be actioned and that is exactly what Changing Streams aims to address. That means research into the development of sustainable alternatives to current plastic use in building, helped by the membership fees underpinning it,” says Neal. “But, like most things, when new innovative solutions are found, these always cost more initially until they become mainstream—when the prices drop according to demand.” He cites the transition from lead-based to non-lead-based paint and incandescent to LED lighting as examples of new initiatives costing more in the early stages. “We are not intending or indeed capable of overnight wholesale change, so will be looking at marginal gains which have a low impact on cost. In time, every new solution we introduce will become mainstream and competitive as much as anything else.” Neal concludes that there is a very limited window, time-wise, to respond and reverse the current trend. “If we do it right then green jobs will be created, the economy will boom again (we are already seeing large finance houses moving away from fossil fuels and into greener bonds) and the world will become a healthier, cleaner place.”
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ith interviewing styles, training systems and hiring techniques being reformed as a result of the Covid-19 crisis, it is vital that businesses in the specialist finance sector are attracting new blood as part of their efforts to bolster their workforces. According to industry specialist Boxtree Recruitment, only 42% of its clients have active training schemes specifically geared towards graduates and trainees joining the industry. The rest have ad hoc, bespoke coaching needs that are determined on a per hire basis, in line with the skills required for the role and the team they are being appointed to. “The specialist lenders we have supported in this space quite often reach a skills gap within their niche,” says Naomi Little, consultant at Boxtree Recruitment. “Hiring a graduate and training from the ground up not only bridges this Words by gap, but offers businesses an affordable way of ‘growing their own’ in line BETH FISHER with ideal credit skills.” Jodie Murray, associate director at Boxtree Recruitment, explains that the biggest benefits can be felt in succession planning, overcoming skills gaps led by location, and moulding candidates to fit company culture—not to mention the fact that it’s an investment in the next generation. “We have consistently helped clients to embrace graduates and trainees when they have requested specific skill sets and industry experience for opportunities presented. The lending recruitment industry is niche and, as such, sometimes we can find these qualities lacking for specific roles. This can be due to myriad reasons around the location, opportunity or specialism of our clients, but it is certainly an enjoyable achievement when How graduates and they heed our advice and appoint a graduate we believe in.” apprentices will help Over the past few years, the industry has rebuild our market after witnessed an increasing scarcity of incoming a tumultuous year skills, with the mission to gain experienced staff becoming an increasingly hefty overhead. While the reduction and recalibration of numerous specialist finance teams was evident during the cursed 2020, many of these people have thankfully been quickly disbursed to new homes. However, it would be wise for the sector not to fall into the same bidding war for talent again. The pandemic generation of young people will be one of the hardest hit this year. Between 23rd March and 31st July last year, just 58,160 apprenticeship starts were reported, 46% down on 2019 figures. Therefore, we urge our own industry to ensure it is providing them with a route to employment—in the interests of these budding careers, the economy, and our own business plans. Fortunately, there are some fantastic businesses who are already offering these programmes, and others that are on the path to introducing such initiatives. DF Capital, for example, recently hired Charlie Michael—who has previously supported similar programmes in other organisations—as its new head of people to help build a varied team of experts. “Having a strong, early-careers recruitment strategy plays well into our diversity aspirations—it will enable us to build a pipeline of talent at a grass-roots level that we can develop and grow through our organisation,” she highlights. To paint an accurate picture of the results achieved by businesses that have executed apprentice schemes, we talk to those at the coalface. 70 Bridging & Commercial
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Oliver Cookson
Ben Kehoe
Graduate at Octopus Real Estate I first heard about the Octopus Real Estate graduate scheme through an advert at Henley Business School. As a student, I did not have much exposure to this sector and, at university, it is rare to come across specialist finance firms specifically targeting graduates. The big consultancy companies and large fund managers get most of the spotlight, so if the industry wants to attract graduates, they should
Graduate at Focus Commercial After completing my studies in economics at university, I sent my CV to specialist real estate finance companies across the North West. During this process, I was approached by Focus Commercial to join their graduate scheme. I knew that working for a well-established SME with a fast pace of growth would provide me with invaluable exposure to the industry. This role has allowed me to be part of a work environment in which I can make a real impact as a graduate on a day-to-day basis, which is rare in finance. In my opinion, many teenagers leave school with a very equivocal idea of financial services in general. I believe that activities such as seminars, networking days and work experience opportunities are the way forward for schools; this will help students realise the potential within a specialist finance career. So far, I have had in-depth training on different types of products, as well as the bespoke underwriting and packaging services that Focus provides to customers. During this process, I’ve built up a network
start to advertise directly to get in front of the right audience. It’s an interesting sector—students just need to know it’s there. Over the first few months, I received a whirlwind of information: from meeting new people to learning new terminology and processes, and understanding the different products across the business. While this is challenging, it is also hugely rewarding and part of the enjoyment of the industry. You are always learning, and you get to experience the buzz of completing transactions early on in your career—my first was in the third week of joining. Octopus Real Estate really does give you opportunity from day one. What’s amazing is just how different each day is. At this stage, my main target is to keep learning and developing the various hard and soft skills relevant to the industry. Like many of my peers, I would like to be in a fund manager’s position in the future but, at the moment, I am focusing on perfecting the job I’m in. I think a graduate scheme like this is great for young people. The fast-paced environment and high turnover of transactions is not everyone’s cup of tea, but if you want to learn quickly, gain varied exposure, grow fast and are willing to work hard, then this is ideal. Octopus Real Estate is unique in that you can be part of this growthoriented culture, but within a team that is supportive, like-minded and fun to work with. What have been the biggest benefits to your business through running this scheme? “It’s been designed so that the graduate can rotate between teams to allow them to gain experience, expand their career options, and ensure that each division benefits from fresh insight. Bringing in someone with no preconceptions has been a big advantage—they question processes we take for granted and, as a result, we’ve been able to create efficiencies. Rotations across the business have also reduced silos between teams, built inter-team relationships, and led to better sharing of ideas across the whole company.”— Ludo Mackenzie, head of commercial at Octopus Real Estate
of contacts and developed my analytical skills by performing market research. I’ve enjoyed working on a range of projects—no day is the same. I’d say the biggest thing that surprises me about the industry has been the robustness of real estate finance in the face of the pandemic. A goal of mine is to gain any relevant professional qualifications that will allow me to progress towards a more clientfacing role in the future. A graduate/apprenticeship scheme like this would be beneficial to any young person who is aiming towards a future career in finance. Working with real estate makes this role more exciting than other more traditional practices. This scheme provides key insights into markets and client relationship management, while also offering the foundations of knowledge for any future property development schemes. What achievements have been made as a result of attracting young graduates and trainees to your business? “One of the biggest success stories is the massive change in our social channels. Our following, interactions and reach have increased by almost 500%, and this is all down to our new marketing trainee. We have seen more leads come through, which has generated more business—in spite of the Covid-19 pandemic.” — John McNamara, CEO and head of development funding at Focus Commercial
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Oliver Eastgate
Elle Hazlett
Apprentice at Hope Capital I originally came across Hope Capital’s apprenticeship scheme online and was instantly intrigued to learn more. Although bridging finance was never mentioned during my education, I think it should be—it’s an exciting industry which is growing significantly and provides countless career pathways. I have only been an apprentice at Hope Capital for a few months, however I have already learnt so much and I am grateful to the whole team for all their support. I have particularly enjoyed working in the HR and underwriting department, as it is a brand new experience. What I really didn’t expect is how interesting the bridging market is. Many people view the financial sector as being boring and repetitive, but there is certainly a lot more to it than meets the eye. The work Hope Capital does is not just about providing a loan, but is a thorough, collective process to ensure we find a solution for every client. Looking ahead, I want to continue working in the specialist finance industry, in either an HR or underwriting role and then, ultimately, become a head of department, providing my team with the support, knowledge and experience I was fortunate enough to receive at the beginning of my own career. Not only does a job in bridging finance present many financial benefits, it is also an extremely motivating industry, which is constantly changing and developing. It provides an opportunity to help brokers and borrowers find a solution and reach their goals, which is really rewarding.
Case manager at Sirius Property Finance (part of The Brightstar Group) I recently returned to the UK after working for a challenger bank in Australia following my graduation in 2019. Coming back, I knew I wanted to build a career in financial services, and The Brightstar Group stood out. The importance of their People Development Programme was a huge draw, so much so that I turned down a higher salary to come here. In schools, I think it is fair to say that financial education and awareness don’t make the top of the priority list, so there is absolutely something for the sector to offer. I started without really having any idea about what bridging finance even was or in what scenarios it could be used. Since then, I feel as though I’ve come on leaps and bounds. As to the most unexpected thing, I would have to say it’s the amount of paperwork required for even the most straightforward of cases. I want to continue to expand my knowledge of the industry and look to get my CeMAP qualification as soon as possible. It’s great that I can rely on Sirius and The Brightstar Group to support me in that, and that they are so focused on training and development overall; I know I can progress my career here without having to look elsewhere. I would 100% advise other young people to consider schemes like this—but do your homework on the company. At Brightstar, and in the Sirius London office where I’m based, I have the chance to work with great people who have decades of experience and are prepared to invest their time in me. Without that kind of support, it would be a very different story.
Why did you decide to launch an apprenticeship scheme, and why would you encourage others to do the same? “It is vital to encourage and support the next generation into the specialist finance industry and equip aspiring professionals with invaluable skills that will provide them with the experience and knowledge they need to succeed in the market and develop their careers. With all our apprentices, we hope that, after completing the programme, they will become permanent members of the Hope Capital team and contribute to the company’s growth and success. We also see it as our responsibility to provide opportunities for the local community, and play our part in supporting young talent in the area. I believe it’s crucial to the continued success of any business that the importance of talent development is recognised and made a priority. With many young people no longer choosing to follow the traditional university route, this is an ideal way to support and nurture those who would prefer to explore the benefits of an apprenticeship. I would wholeheartedly encourage more businesses, inside and outside our sector, to consider implementing such a scheme and investing in the younger generation.”—Gary Bailey, managing director at Hope Capital 72 Bridging & Commercial
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Abigail Jefcoate
Elliot Bryan
Apprentice at The Property Finance Collective I heard about this scheme through a local apprenticeship provider who put me in touch with the company. I think there is a reasonably good amount of education and awareness at school regarding finance, however the specialist side is perhaps not touched upon enough. This could be improved by including different units in the curriculum to explore this area more. Also, in terms of apprenticeships, I feel there could be more information available about what is out there and the opportunities that these schemes can present, as schools mainly focus on encouraging students towards university. I have learnt a lot from my colleagues about a variety of different products and services that are on offer to developers to suit their needs, and I will get to know a lot more as I progress within the industry. I also believe that this job has helped me become more confident. The thing that I’ve enjoyed the most is learning about something relatively new that I would hopefully like to make a career out of, and I can honestly say that there is nothing I have disliked so far. The biggest eye-opener for me was how quickly funds can be made available when clients take out bridging loans. I would definitely encourage others to join an apprenticeship scheme like this, as I feel it is a great way to gain qualifications and experience at the same time, which will prove to be very beneficial for the future.
Marketing assistant at The Property Finance Collective I first saw the graduate role listed on Indeed while searching for marketing job opportunities. At secondary school, I felt there was a lack of support in providing knowledge on careers and apprenticeships due to their main focus being on preparing students for university. This meant that all guest speakers and presentations were university and course related. At university, however, we were given numerous career resources and information . . . where we could talk to employers from a wide range of sectors, including specialist finance. Within secondary schools, I feel pupils would benefit from being given more information regarding specialist finance and the apprenticeships available to raise their awareness and help them make fully informed decisions on their future. This could be done through guest presentations and Q&As, either in school or through videos with finance specialists, accessible to all students. While I have only recently joined this graduate scheme, what I have learnt so far, from the application process alone, is that there is room for so much creativity within the finance sector, which I feel a lot of people are unaware of. This can range from providing creative financial plans for clients to producing innovative ideas to advertise the company’s services. I would like to continue developing my knowledge and use what I have learnt to create a successful marketing strategy to appeal to clients and help build on the company’s customer base and reach on social media. I think that a career within this sector offers large scope for a young individual to learn and progress within an environment that is dynamic and diverse.
What big achievements have been made as a result of attracting young graduates and apprentices to your business? “Elliot has been with the business for just over a month, and he is already progressing towards working cases which, for a 19-year-old, is just incredible!” — Michael Primrose, managing director at The Property Finance Collective 73 Jan/Feb 2021
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Luke Pickles
Graduate at Hodge I heard about the Welsh Financial Services Graduate Programme (which Hodge is in partnership with) through my sister, who works in finance in Cardiff. She knew that I’d been looking for jobs during lockdown after finishing my degree and, in her role, she has come across the scheme, so she sent over the job advert to see if I was interested. The start of my graduate programme has been somewhat odd, owing to the fact that most of it has been spent in my bedroom! However, I’ve still managed to get a much firmer grasp of industry standards and the day-to-day functioning of a savings and lending bank. My role is in the accounts team and, as such, I liaise with all departments at Hodge, which has given me a broad perspective on the business. I’ve really
enjoyed meeting my colleagues and getting to know them personally and professionally, albeit in a virtual capacity.The biggest surprise I’ve had entering the industry is probably the wide range of educational backgrounds that people come from. I think sometimes young people can get the impression that if you didn’t study economics and/or finance at university, then the door to financial services is closed to you. This couldn’t be further from the truth; I studied International Relations and Politics and have had no problem integrating. It’s really encouraging that you can learn what you are passionate about and still pursue a career in finance. The support has been fantastic. I not only have my line manager and team to help me, but also the team at the Welsh Financial Services Graduate Programme, who are constantly checking in and making sure my experience is optimised. This is something you may not get if you were starting in a regular position. Looking forward, I think I would like to transition into a more project-based role. My strengths lie in my personability and creativity, so contributing to helping the business innovate is something I feel I could do well. But, at the moment, I am content to continue learning about the business and getting as extensive a knowledge base as possible.
Natasha McArdle
Trainee commercial finance broker at 978 Bridging The position at 978 Bridging popped up on a job search website when I was still working as an insurance underwriter and looking for something new. It seemed perfect for me, so I applied. The biggest thing I’ve noticed so far is probably how friendly and happy to chat a lot of people have been. This is obviously an industry that thrives on relationships and it’s definitely great to feel a part of that, especially when you can harness it to help a client. The actual
finance side has been a massive learning curve, but I think I’m getting there. I’m currently focusing on building our brand and client base, and I’m really excited to see where that takes me. I’d also like to get more involved in property investment in general, but this might be a few years down the line—both my parents are involved in it, but I’d never really heard about bridging finance before. Obviously seeing what specialist finance is available and being educated on it is really important for any property investor. That’s another thing we’re looking to do, with plans to scale up our YouTube channel early this year. There’s so much opportunity out there, particularly in specialist finance, where it tends to be with smaller companies, sometimes family businesses. This makes dealing with and arranging finance for our clients relatively quick and easy—and massively fulfilling knowing we are such an important part of their project and business. I’ve learnt so much in a short period of time and look forward to making an even bigger impact this year.
Why will schemes like this be increasingly important for young people in 2021? “This past year has shown us that you can never rest on your laurels; we just do not know what’s around the corner. Young people have never had it so tough, with a huge lack of certainty around education in terms of assessment formats and even the way schools and universities will operate.There will undoubtedly be rising unemployment in the next 12 months, so young people need to consider all options, and I think we are offering a fantastic opportunity to Why did you decide to launch a graduate scheme, and enter a dynamic and creative industry.This is a chance for them to learn while why would you encourage others to do the same? improving their knowledge and diversifying their skill set, hopefully with the “We work closely with the Welsh Financial Services Graduate Programme which prospect of making a lot of money, too. I think they will be seeking alternatives allows us to give graduates an opportunity to see how the business operates, to further education, so a trainee position may well be favoured over a master’s and hopefully a full-time position at the end of it. In fact, I got my first job in or other options. It will mean they have their foot in the door with an employer, financial services at Hodge through this.The scheme exists to ensure that Wales which is going to be so important in the coming years.We may even see a swing retains its high-calibre graduates to support the Welsh finance sector, creating from university education back towards on-the-job training, with people being an elite talent pool to bolster Welsh companies. I believe in it so much that, last squeezed financially nationwide.” — Simon Das, managing director year, I joined the advisory board.”— Ryan Davies, interim managing at 978 Bridging director of mortgages at Hodge
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Sam Njekwa
Sam Baker
Graduate at Clifton Private Finance I found this role through a recruitment agency, as I was searching for a job with a progressive route in the finance industry. I studied business from GCSE through to university level, so this is where most of my knowledge of the sector came from at the time. It wasn’t until I started working in it that I discovered the different specialist finance paths that were available to me. I have learnt a lot during my first few months at Clifton Private Finance—particularly the various scenarios in which clients would take out mortgages and bridging loans, and how to tailor my approach to suit each individual’s requirements. I have enjoyed every aspect
Graduate at Clifton Private Finance I heard about the programme through the Cardiff Capital Region Graduate Scheme, which was marketed on the classic job sites such as Indeed. I attended a webinar event from them and got some advice for my application before sending it off. I had little idea during my school years about this type of career—much of the info given was quite generalised and really only spoke about working for big banks, rather than specialised, smaller firms and career options. So far, I have learnt a lot. I knew nothing about mortgages, bridging and property finance, but I already feel confident speaking with people in and outside of work about what I do. I’ve received positive and constructive feedback from the senior brokers, and I can see a clear road map of where things are headed. I’ve been blown away by the levels of support and leadership shown by the team and it has made the role a lot more enjoyable. Not much springs to mind with regard
of the job so far and am keen to take on more responsibility as I work through the graduate scheme. The one area that can be a bit daunting is all the compliance and regulatory standards that must be consistently met. There is a lot to get to grips with, however it is coming together as each day goes on. The biggest revelation to me has been the relationships between different specialist sectors and how they intertwine with each other to reach a common goal. I would like to eventually be a senior broker, and maybe even run my own firm. I am attracted to the prospect of being in control and managing my own work. A programme like the one I’m in provides the perfect route and opportunity to develop my career and reach my goals. Working closely with two senior brokers and another graduate who is a year ahead of me has been very beneficial and motivating, as this allows me to set goals and envision my career in the industry. As for the near future, I am focused on completing the scheme and obtaining my CeMAP qualification to go with it.
to dislikes—although the important scenarios we deal with, and the regulations that we must always keep in mind can be intimidating. However, as time has gone on, I am finding it less and less stressful, with the help of others in the office. I hope that I get the opportunity to progress my career within Clifton Private Finance. To achieve this, I aim to further develop my broking skills, industry knowledge, communication and interpersonal skills, and efficiency. I aspire to remain in this company for the long term as, from my perception of the job market in general, I would be unlikely to find an alternative employer that can offer me the same level of support, leadership, training, benefits and all-round job satisfaction that I am experiencing here. I just hope to keep bettering my skill set and trust in the process that is in place. Why did you introduce a graduate initiative? I would certainly recommend this sort of placement to anyone in “The reason we decided to launch the scheme was two-fold. Firstly, we have a similar situation to where I found myself after university. I had no struggled to find talent within the industry to fit straight into the company. prior sense of a great calling to work in financial services, however, I think, ultimately, we want all of our brokers to be of a similar mindset I am really enjoying my work and am beginning to develop a keen when it comes to company ethos, how we treat clients and workflow process. interest in the industry. In short, my advice would be to not rule Understandably, brokers that have worked elsewhere have their own way of anything out because you may not be passionate about it yet—the doing things—and these aren’t always synonymous with how we work. The right people and environment may just change your mind. second reason is that from mine and my colleague and friend Mat Phillips’ point of view, we almost fell into this line of work, and have come to realise over the years that this is fairly common. I have always thought that, with all of the graduate talent out there and the same people moving from company to company within the industry, why is there not a direct route from higher education to the specialist lending sector? It’s a great opportunity which we both would have grabbed with both hands.” — Sam O’Neill, senior finance broker at Clifton Private Finance
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Harry Yates
Senior analyst at Avamore Capital I did my undergraduate degree in Investment and Finance in Property at Reading University, and was lucky to be exposed to lots of professionals and potential career opportunities. Michael Dean, a mentor via the Reading Real Estate Foundation and principal at Avamore, invited me to join the company for a couple of weeks’ work experience in the summer of 2018. At the time, the team was just seven people and it was a great chance to find out more about the business and understand what the day-to-day would look like there. I enjoyed it, so I went back a few months later; then I returned for the 2019 graduate recruitment evening after which I was offered a job. At university, I was in a good position to know about the opportunities available. I was doing an industry-specific degree and we were sent weekly emails about potential postings and invited to career events. At school-level, however, I knew very little about specialist finance, or real estate for that matter. I think we need to see more variety at school around potential career pathways; at age 17, we probably all felt that there were a limited number of jobs in the market. At that time, I was interested in a course related to economics, a subject I enjoyed at school. The degree I chose had a 100% employment rate, so I thought it was a good option, combining an interest with something that had real job prospects at the end. During my studies, I had one lecture that touched on what I now do on a daily basis. It’s fair to say that I have learnt a huge amount. What I like most about Avamore is the autonomy that is given across the team. I know that I am taking responsibility for a lot more than many of my peers working at different companies. It comes with challenges and can of course be nerve-wracking when you are new, but I wouldn’t change it—it’s definitely made me develop far quicker than I would on a programme that might have had more structure or been in a bigger company. The thing that surprised me most was the willingness of people to help. What we do is high pressure and fast paced, but I find myself learning a lot from people internally and externally, particularly when I am liaising with third-party service providers. There are so many moving parts to a deal, and it feels as though everyone is eager to support one another to get it done—even if that means taking a bit of extra time to explain something to someone who’s new to the industry. I’ve grown a huge amount in this environment without even realising it. I’ve developed as an analyst organically and that’s how I’d like to see my career continuing to build. I would definitely advocate joining Avamore’s graduate intake. I don’t know of anywhere else where you learn as much, get thrown into the mix early on and then, ultimately, reap the rewards. I’ve been at the company for almost 18 months, but it feels like I’ve been part of the team for years—I take that as a good sign. Has the graduate scheme posed any challenges, and how did you mitigate them? “There are always challenges with hiring graduates, no matter what their role is. They come to Avamore and this is the first full-time office job they’ve ever done. We often take for granted the basics of working so, with graduates, it’s important to make allowances that simple mistakes are likely to happen. Also, the environment we work in is very fast paced, and it’s easy to forget that someone new, graduate or not, is likely to find things difficult or not understand at the early stages. To mitigate this, we have an onboarding process that sets three-month goals and requires check-ins—this ensures that the graduate is growing and heading in the right direction.” — Henry Manley-Cooper, head of credit analysis at Avamore Capital
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Laila Perryman
Case manager at Sirius Property Finance (part of The Brightstar Group) My sixth-form economics teacher had a mutual friend in Richard Stock—one of the brokers at Sirius. This is how I obtained my work experience placement with The Brightstar Group in 2019. Looking back, the week I spent there really did help me put my best foot forward into what is now the start of my career! I was so I intrigued by the specialist finance broking this firm does and felt so welcomed by every person at Sirius. Sixth forms and schools in general are still so stuck in their ways of, ‘If you get really good grades, you should be off to university’. I, however, didn’t think this path was for me. I think it would be beneficial to educate students about the process of getting a mortgage and what this entails; the effects of having adverse credit to your name; and, in general, more about borrowing money and the variety of different banks out there. I wouldn’t have been able to name even half of the banks I now deal with on a daily basis. I have been at Sirius for just over three months as a case manager, and I am lucky enough to work with some of the most knowledgeable brokers in their specialist fields. I have already achieved my customer service qualification, received Trustpilot reviews from clients, and built some of the best relationships with those I work closely with in the office. I have enjoyed learning from two now junior associates, who were once in my position as case managers, the most. They really help motivate and show me every day what’s possible with Sirius and the growth ethic here. Looking ahead, I would like to master the art of case management. The two brokers I currently help with cases are inundated with clients with large BTL portfolios and million-pound residential houses. This is keeping me challenged at the moment in the current climate. I would like to study for my CeMAP in due course and eventually become an associate at Sirius. At 18, I feel as if I am at an advantage over others my age, as I believe being surrounded by professionals and immersed in a work environment makes me learn more and faster than reading about specialist finance from a book. What have been the biggest benefits to your business through running this scheme? “At The Brightstar Group, we have always been keen to encourage young people into the business as we feel that, in terms of diversity, the sector is underrepresented in many senses, young people being one.The sector has often been referred to as ‘male, pale and stale’, so we have worked hard to challenge this notion, recognising the benefits that are brought to the business by having diversity. As well as championing the Women in Finance Charter and all the benefits that this brings, we are committed to recruiting young people who we find have so much enthusiasm, energy and potential.Young minds also bring a different dimension when it comes to formulating ideas and approaches, and their grasp of technology is superb. They are not afraid to try new things nor to embrace change, and they have a thirst for knowledge and the ability to absorb information and skills very quickly. Hiring and nurturing young talent is also key to the evolution of your business and to succession planning.You always have to be looking for the next generation of brokers, managers and senior managers and, rather than leaving this to chance or trying to scout the market for available people when the need arises, we have found that developing ‘home-grown’ talent has reaped so many benefits for us. Indeed, our commitment to our ‘greenhouse’ and ‘growing your own approach’ has allowed us to transition many people from more junior and administration roles to others in the business, including at executive level.” — Clare Jupp, director of people development at The Brightstar Group
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One Day
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One Day
The Financia l Intermedia ry & Broker Association (FIBA) held its debut virtual annu al conferenc e on 20th January and kicked off w hat is bound to be another yea r packed with online events (ours included). So how did it go? We co mmissioned a broker and a lender to g ive us an honest ‘revie w’ of the ex perience
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One Day
Danielle Evans Relationship manager at Avamore Capital L
eading up to the event, I am emailed reminders with links to the webinar, as well as one on the day that makes it really easy to access the portal. Those who know me will vouch for the fact that I’m one of the least technologically efficient people out there, so naturally I run into problems straight away. I need Google Chrome, a ticket number, email address validation and so on—and this is before I am even logged in to the conference! I’m sure this wouldn’t be too difficult for most people… This is the first virtual exhibition I’ll be attending and I have absolutely no idea what to expect but, in real life, I love visiting these types of events, so I jumped at the chance to see how it compares. It is set up to be a four-hour conference with virtual exhibition ‘stands’ or ‘rooms’, and panel discussions at intervals throughout the day. I am more than happy to give this a go, do some networking, find out what’s on offer across the industry and hear the panellists discuss hot topics, without my whole day being monopolised—and, of course, not having to spend hours in the car getting there. Once I’m in, it’s really easy to navigate around the rooms. The layout is clear, the branding of each exhibitor is bold, and you can virtually enter and have conversations with each business there. Early on, it is slightly clunky turning on the camera and microphone, however, with so many attendees, this is bound to be the case; in the grand scheme of things, it works really well. I am able to visit a few lender stands, listen in and ‘go live’ to ask questions and/or have a general chat, as well as hear the conversations going on with others. People are able to dip in and out of rooms and engage as much or as little as they want to. The functions are simple enough; there is a ‘raise hand’ feature, a chat box at the side, and the ability to turn on your camera and mute as desired. At 11am, the first speaker session begins, opening with a positive overview presented by Adam Tyler, FIBA’s executive chairman. He is really engaging and provides some impressive stats on the growth of the association, as well as some general housekeeping rules (toilets are a lot easier to find during virtual events, at least) and some tips on how to navigate the system throughout the day. As mentioned, the turnout is commendable: 39 speakers, three seminars, and hundreds registered. Next is a 25-minute talk by Clem Chambers, live from his residence in
France, covering some general economic topics and, of course, the buzzword of the moment (well, year). In all honesty, the address isn’t what I was expecting to hear at this type of event, but he made some interesting points, nonetheless. Moving on, it’s time for the first panel debate, which includes some senior names in the bridging and commercial sector: Nick Jones, commercial director at Roma; Paresh Raja, CEO at MFS; Mark Posniak, managing director at Octane; and Daniel Richardson, partner and property receiver at CG&Co. I really enjoy listening to this discussion, as I feel it is implicitly relevant to the industry at present and includes the opportunities and challenges faced by brokers and lenders alike. It concerns a variety of topics, including the appetite for commercial lending; retail demand within city and town centres; and suburban development and the need for local retail to branch out into these areas. There is agreement that collaboration is key, and that diversification of business models is essential to maintain growth moving forward. From a lender perspective, there is a unanimous appetite to lend, however the dynamics of this have naturally changed and it’s more important than ever to match the correct customer with the right lender to ensure that the transaction is harmonious. Every finance provider on the panel expresses that they are still able and willing to transact, and that the pandemic and surrounding challenges can in fact be flipped into prospects for those who want it. I am filled with ideas and inspiration as the conversation comes to an end, and my notepad is full as I head to the exhibitor stands, ready to ask the speakers my questions. There is a 30-minute interval during which you can join these rooms, grab a coffee/have a comfort break/break up your rowing kids—or a combination of all three. Then it’s back to the main room for the second and third seminars, hosted by Liz Syms, CEO at Connect for Intermediaries; and Paul Brett, managing director for intermediaries at Landbay. Five minutes in to Liz’s, my technology really starts kicking off, probably due to the fact that my fiancé is on a conference call and my daughter is logged into some form of social media. I throw them off the WiFi, so that I am able to re-join. There is a good mix of people featured in the panel discussions, talking about the growth and development of bridging and 80
Bridging & Commercial
“It’s more important than ever to match the correct customer with the right lender to ensure that the transaction is harmonious” specialist lending, as well as the changes in the BTL sector, shifts impacting landlords with taxation and regulatory obligations, and the importance of seeking advice with these transactions. The focus is on a solution-based approach when assessing complex needs for clients and, again, a reinforcement of the message that there is the opportunity to do quality business over the coming months and years. During this part, the chat facility is useful to enable listeners to put across their questions and opinions throughout. This gives the panel a chance to address the points raised but also allows attendees to converse and share experiences with one another without detracting from the panel sessions. Some of the more controversial comments include brokers questioning lenders’ willingness to lend and demanding to know why they’re being made to jump through hoops, and whether undervaluing is a result of valuers being ‘scared’ to claim on their PII. The seminars wrap up after about an hour, and the virtual rooms remain open for visitors until 2.30pm, providing a final opportunity to discuss any case-specific enquiries with the exhibitors. It’s really nice to be able to interact with people on a more personal level than via phone, and good to see some familiar faces as well. Overall, as far as virtual events go, I feel that this was really well organised by FIBA and they deserve huge credit for the work that has gone on in the background to pull it together. I think this is fairly reflected in the impressive attendee list, and I would certainly be involved again. On some level, it has given me a little of the interaction that I’m sorely missing, given that I’ve only physically visited an office three times since March last year. While this is the best we can hope for in the short term, I do think that there is absolutely no substitute for in-person engagement and I am champing at the bit to be able to get out to a faceto-face event. I am, however, left with a really good impression of all at FIBA, and hope that Avamore Capital can be further involved in these events in the future.
One Day
Phil Mabb Director at Bridgedevelopment Property Finance I
am a member of the FIBA executive team and have been aware of the conference for some time, which is highly anticipated, particularly in view of the wider conditions we are all operating under. There has been plenty of work going on behind the scenes to bring sponsors, lenders and brokers together—well done to the team and a special mention to Sam CameronCarruthers for all of her hard work. The steady stream of updates from both the association and the event sponsors kept me well informed of the programme and reminded me to plan my day— something I ignored, fortunately not to the detriment of my experience. Access to the exhibition ‘rooms’ facilitates a half-hour preview or warmup prior to the first panel session, which starts with Adam Tyler proclaiming that the event has attracted in excess of 350 registrants—a proper result. In fact, due to the software’s participation limitations, registration had to be closed early. Lesson learnt for next time… I have done a bit of research on the participating lenders and built a matrix of their product offerings and where they lend. It would be fair to say that, on the day, all bases are covered, including bridging, refurb, development (including ground-up), BTL, regulated, second charge and commercial. Short and term loan funders feature, together with technology and insolvency providers—something for everyone. Needless to say, London is represented well, but so are the regions, with lenders from the Midlands and North. As formats go (let’s face it, we’ve all had time to attend virtual events over the past 12 months) I find it remarkably refreshing. It kind of reminds me of Cluedo—and, if anything, the four-hour window may be a bit too condensed, and there could have been more time for breaks. I intend to participate by standing (I don’t sit at work any more) in front of my TV-sized monitor, allowing me to see the ‘whites of the eyes’ of the participants more readily than on a tablet or mobile, but I’ve loaded the Bizzabo app on my phone just in case, which turns out to be a good decision. I have not properly planned my day so, by using the app, I can attend one virtual room via the monitor and, on my mobile, take a peek at what’s happening elsewhere—to avoid missing something. Being able to move freely around the 14 exhibitor spaces is great, since the number of attendees in a given room makes it difficult
to get involved at times. So, I can pop back later when things are quieter, or while one of the three panel sessions are being held. Don’t you just love being in control? More often than not, larger conferences are merely seminars demonstrating lender products and services, with a Q&A at the end or via the chat room. Here, we are able to speak at will, driving the subject matter and interaction at all times. Not being the most patient of sorts, if I find myself in too crowded a room, I am able to drop in and out as and when it suits. I find myself listening to a development finance proposal being put forward by a relatively inexperienced regulated mortgage broker, who is sympathetically supported by the two LendInvest representatives until it is felt it should be taken offline for a more detailed discussion later. This is novel in so much as it was focused on a specific transaction and its unique circumstances—something a typical, IRL seminar simply cannot replicate. Overall, I find there is a clear sense of purpose, and rather than let those who shyly enter the rooms lurk in the shadows, just listening, the hosts are more than willing to coax direct dialogue and participation from them, thus affirming the very purpose of the event. Despite the rules and regulations we’re currently living with, the vibe and sentiment are undoubtedly positive and upbeat (save for a dissenter in one of the chat sessions who is insistent on stating the obvious about how lender behaviour has been impacted by the C-word—spoilsport!) and the outlook for the specialist finance sector appears relatively rosy, particularly when there are many customers in ‘an hour of need’ who are unlikely to find support from the high street. Spring may be a period of lull, but there are numerous lenders that are formulating plans, launching product sets and reviewing existing ones, and adapting to the new landscape.You cannot stand still and prosper, right? There are three panel sessions, featuring several senior industry figures, and it is pleasing to see a joined-up message. Dialogue centres around repositioning our high street; how client demand might fuel product innovation; the need for planning reform; the potential resurgence of livework property creation; and the positive and continual growth of broker distribution to support lenders moving forward. On reflection, I have three key takeaways: there is plenty of life in our markets; the
“Spring may be a period of lull, but there are numerous lenders that are formulating plans, launching product sets and reviewing existing ones, and adapting to the new landscape. You cannot stand still and prosper, right?” support is there for our borrowers; and we (lenders and brokers) need to work even more closely together for the benefit of our clients. Keynote speaker Clem, a non-property-related markets expert, puts our industry into content with the wider business world: property is an ‘active’ sector that will help drive economic recovery. As such, is there a moral imposition on our sector? Here’s my position: the passive sectors (think hospitality and retail) need those in the active ones to pull them out of the mire in order to prosper. I, for one, can’t wait to spend generously once those industries reopen. No one in our line of business will ever not be in favour of in-person meetings— it’s just human nature—but while we live under a dark cloud, I have to applaud those who simply get on with it. A consequence of the conference’s busyness means that the opportunity to secure what might be deemed a one-to-one meeting was somewhat limited. It’s no substitute for a face-to-face, but a good halfway house. Apart from getting a bit of much-missed human interaction, my goals for the day were to say hello and reacquaint with friends, old and new, and gather what plans the lenders have—a mission I accomplished with some aplomb. Like it or not, virtual conferencing is here to stay. While I hanker for the days of old, sitting in a cafe sipping a hot coffee, or in a bar/ restaurant with a beer or glass of wine, or better still, food(!), right now I thank my lucky stars that we work in a sector with promise in the here and now.
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Limelight
A snapshot of specialist finance businesses’ corporate responsibility plans for 2021 1 Who: Market Financial Solutions (MFS) What: MFS will be supporting its charitable partners and identifying new community initiatives and events to get behind How: MFS champions a number of charitable causes each year, including being the main sponsor for Children with Cancer UK, for which Tiba Raja, our executive director, is part of the board that helps organise its largest annual fundraising dinner. As well as this, we are avid supporters of the Richard House Children’s Hospice, Rays of Sunshine Children’s Charity, Oracle Cancer Trust, and the Vedanta Institute London. As part of our CSR strategy, we will continue to assist the important work of these organisations over the coming 12 months 2 Who: PCF Bank What: PCF Bank is committed to further reducing its carbon footprint in 2021 How: As part of a drive to become a greener company, PCF Bank is partnering with Mossy Earth, which runs rewilding and reforestation projects. A tree will be planted in the Southern Carpathian Mountains for every carbon-emitting asset financed by PCF Bank, which will help provide jobs and ensure safe and habitable areas for indigenous wolves, lynx and bears. We will also support Mossy Earth in one of their projects to protect biodiversity and enhance wild ecosystems, to be chosen by our staff. PCF Bank is also introducing a variety of schemes to encourage green travel, including tax-efficient electric vehicle and cycle-to-work programmes, and interest-free season ticket loans for public transport. In addition, we’ll be electrifying our own fleet in 2021 3 Who: Time Finance What: Time Finance is committed to strong corporate social responsibility, including reducing its carbon footprint to net zero, doing charity work, and diversifying its staff How: We have an ongoing project to formalise the great work we already do and are looking at new initiatives sponsored by two members of the executive board. As part of the plan, we aim to promote the use of electric/hybrid vehicles by all staff and customers; encourage gender and ethnic diversity within the workplace, particularly at senior levels; allow employees to nominate and vote for our charity of the year; and formalise and support the local charity efforts of our employees. We also intend to develop new products which will aid the green economy with reduced rates, and we are aiming to have a positive impact on the UN’s sustainable development goals. Time Finance is currently working with a consultancy firm to level up our environmental, social and governance standards 4 Who: OakNorth Bank What: OakNorth’s mission is to empower growth businesses, as this makes the world a more interesting, dynamic and diverse place to live. It seeks to create and support opportunities for the conservation of natural resources; female empowerment; education, particularly in STEAM subjects; social mobility; entrepreneurship and mentorship; and inclusive development of underprivileged communities How: We will achieve this by investing in long-term, replicable and sustainable development models that effectively address the various social needs and problems our communities face today. Our team will also continue volunteering for a number of initiatives and participating in donation drives, as well as matching grants. To continue reinforcing the positive impact growth businesses have on communities and economies globally, we donate 1% of our group profits to supporting charitable causes and socially-minded enterprise 5 Who: Valorem Partners What: Playing its part in raising awareness of mental health and wellbeing issues by providing solutions to this to the market through expert guidance and advice, as well as improving diversity and inclusion throughout the industry and helping more women to get into senior leadership positions How: As part of our mental health and wellbeing plans, we have agreed to support the charity Mind (Birmingham) for 2021, and look forward to bringing some fun and imaginative initiatives to driving awareness and championing the great work that they do, while also fundraising. We have launched a permanent partnership with CBTeach, which provides performance and wellbeing solutions to corporate clients. With regard to fostering diversity and inclusion in the industry, following our pledge to the Women in Finance Charter and the partnership with The GC Index from 2020, we’ve launched the Inspirational Women in Finance Podcast, which aims to study the high-performance habits of senior women in the finance sector to inspire the next generation of people into all parts of our market 6 Who: Whitehall Capital What: Whitehall Capital has launched the Whitehall Charitable Loan Fund (WCLF) How: WCLF provides substantial sums to help people through difficult times. They are interest-free and offer flexible repayment options, and we work with the borrower to agree a plan that suits their requirements. The loans are typically used to make a down payment when buying a home, provide assistance to people starting their own business, and those with existing businesses who need help with cash flow. WCLF also provides loans for people’s personal needs including assisting with children’s tuition or the payment of utility bills and credit cards. Whitehall is also continuing to fund various charities, including Chai Cancer Care, which provides expert support services to any member of the Jewish community affected by cancer, including patients, their families and friends; and GIFT, which provides food for those in need 7 Who: Octopus Real Estate What: Octopus Real Estate is aiming to grow its contribution to community volunteering over the year, through the pandemic and beyond How: Our primary way of getting involved in charity work is through our foundation, Octopus Giving, which helps organisations by donating money and our time. Octopus Giving is nearing the end of a three-year partnership with its current charity and is now accepting applications from organisations. The focus for 2021 will be finalising selection criteria for the new charity partners and ensuring staff are as engaged as possible in the onboarding process. We have also entered into a skill-sharing project with Kentish Town City Farm, as part of which we will offer support for IT, marketing, sales, L&D and any other department from across the group to give them the support they need through the pandemic. On-site volunteering days at the farm have also proved popular, with our team ‘mucking in’ to help it run smoothly
Backstory
‘Your business is only as good as the people in it’ Harley Kagan, United Trust Bank’s (UTB) new CEO, discusses how the bank managed to overcome the challenges of 2020, plans he has for growth, and the lessons he has learnt throughout his career. Harley is an enthusiastic Arsenal fan, yoga practitioner and bastion at UTB. While these first two facts might come as a surprise for some, the third is undisputed. His contribution to the bank spans over 20 years—starting off as finance director and later becoming managing director. He has overseen its organic growth, including the successful expansion into new sectors. He worked closely with former CEO Graham Davin for much of this time, notably on the bank’s MBO in 2004. Now, Harley is excited by the opportunity to take on the role of CEO, in which he will lead UTB through its next phase of development. UTB expected to complete more than £1bn of new loans in 2020—a record for the business—was that achieved, and what are your plans for continuing that growth trajectory this year? Yes, we did complete well over £1bn of new lending in 2020 and we plan to surpass that in 2021. We hope that the lockdown and vaccination programme will help the country recover from the pandemic as we head into spring. Our plans for 2021 are robust and ambitious—I’m sure our competitors would love to know what we have in mind! However, we do have a number of exciting new products set for launch. A lot will depend on the outcome of the Covid vaccine programme, the repercussions of Brexit and the path of the economic recovery. For the time being, the bank is focusing its efforts on continuing to support brokers and borrowers with competitive funding solutions delivered quickly and efficiently. Last April, UTB introduced automatic ID verification sharing and a facial recognition service; how important is fintech in your future strategy? Our aim is to enhance broker and customer journeys and to make the experience of dealing with UTB simple, straightforward and ultimately successful. Fintech offers exciting possibilities for lenders and brokers, and we have several initiatives planned for 2021. For example, we have just launched our new fast-track bridging service, which will provide written offers within 72 hours of application (subject to AVM). What is, in your opinion, the key quality you must have to be successful in the specialist finance industry? I think there are a few: expert knowledge, a thorough understanding of everything you build your business around, and a desire to look after your customers.There is also the understanding that you have various stakeholders and you need to balance the requirements of each of them.
How would you describe your management style? Inclusive, but challenging. I try to actively seek out new ideas and different opinions. What does the industry not know about you, and UTB? I am a frustrated Arsenal fan and keen (but amateur) yogi who is still trying to learn to stand on my head! I read a lot of books, especially biographies, as you learn so much about a person, although some things you may wish you hadn’t… I’ve just finished reading the Tom Bower book about Boris Johnson. For UTB, most visitors are surprised that, unlike many other businesses, the senior team don’t have their own offices. Everyone sits in an open-plan environment with access to meeting spaces. How will you be looking to help rebuild the specialist finance industry in 2021 after a challenging year? We will continue to support our broker partners, remain open for business and keep enhancing our products and services. During 2019, the bank invested considerably in new technology, hardware and software services, which would allow us to continue operating if a major incident forced us to vacate our head office for a short or extended period. Although we didn’t have a global pandemic in mind at the time, the measures taken have worked extremely well in enabling a vast majority of staff to work effectively from home. What would you say has been your biggest achievement to date? My biggest achievement in the industry must be organically growing UTB into a respected and successful business and building a lending platform that provides excellent products and service to the broker community. However, to quote Steve Jobs,“Great things in business are never done by one person, they’re done by a team of people.”
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How did you spend your very first pay cheque? I took my then girlfriend out to dinner and proceeded to knock a bottle of red wine off the table which went everywhere! Fortunately, my date saw the funny side and we’ve been married for 26 years. Most memorable moment from your time in the industry? The B&C Awards have been memorable over the years, but the one which really stands out is when it was held at the Tower of London. It must have been 40 degrees in the marquee, but everyone was having so much fun that nobody left. Another one is the time our brand mascot, a beautiful owl named Elvis, came into the office for a photoshoot and to meet the team—it was quite surreal. Biggest lesson you learnt during 2020? Be flexible, don’t take anything for granted, and remember that when people work together, you can overcome just about anything. Dream job – if you weren’t doing this, what would you do? I’m very fortunate to have my dream job, but I’d happily be a restaurant/hotel critic on the side.
PASS1ON We’re immensely proud of the relationships we’ve built with our brokers over the last decade. So we’re kicking off our 10th birthday celebrations by sharing some Valentine’s Day love...
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