Specialist Lending Solutions: How has the market changed since you launched 10 years ago?
Hugh Wade-Jones: First of all, high street broking has evolved; 10 years ago, lending criteria was much softer and persuasion, pressure and influence were vital to get a deal done. Placing a deal with the right lender was the start, but hiccups and bumps were much easier to sort out with negotiation and charm.
In terms of the lender landscape, it has changed beyond all recognition and very few of the lenders have survived in their original guise. Lenders are now much more rigid, driven by regulation, and still carrying the remains of the financial crisis. Therefore, brokers need to be much more detailed, accurate, organised and analytical, because a lender’s ‘no’ is now almost fatal. Self-certification, fast track and securitisation certainly made things easier, and now brokers have to be much quicker to adapt to the market.
There have been changes every year – elections, wars, failing banks, increasing regulation, a referendum and so on. They cause a lull in activity while everyone worries and absorbs these changes, but everything soon returns to ‘normal’. Political and economic change is just something to deal with.
It is possibly a little disappointing that from a technology point of view the lenders have not progressed further, as the same fairly basic processing issues exist which I hoped might have been ironed out in a decade. Some of the smaller, more niche banks and lenders are looking to address these, however, which is great.
SLS: Your launch was around the same time as the start of the credit crunch – were there any regrets when you came to market?
Islay Robinson: We set up Enness in 2007, the same week Northern Rock crashed, so it was a very challenging market to enter. The banks weren’t lending to mortgage brokerages – or anyone – but we manged to secure a £30,000 overdraft from Allied Irish Bank. Unfortunately, they were one of the hardest hit, so they withdrew the facility which put us in a very precarious situation for a few months.
Entering the market when we did, in what was essentially economic Armageddon, was definitely the most challenging part of the last ten years. As a young company, with three employees in a small office in Battersea, navigating the difficult climate and managing to stay afloat during our first two years was extremely difficult and required a lot of resilience and belief in Enness.
However, without that experience, we would ultimately not have been as successful as we are today. A decade on, those three employees have grown into over seventy expert Enness staff, based in London’s Mayfair, Dubai and Monaco.
What would you have done differently had you known the way the economy was going to go?
IR: Nothing, we’re glad we didn’t know – starting when we did, we’ve accepted we can’t rely on the market for a foot up, so have created opportunity instead of lamenting markets. It may have also made us hesitate on timing or acquiring the resources we needed, and made us stick to the perceived ‘safety’ of our current company.
Incredibly, the London market has continued to rise over the decade and rates are currently at an all-time low, so we don’t have many complaints. We’ve built one of the strongest and most recognisable brands in the industry and have a huge growth curve planned, so the economy hasn’t been too much of a hindrance.
What is the biggest lesson you’ve learnt in the last 10 years?
HWJ: Find a niche and stay in it – there have been many changes in the property and mortgage markets over the last ten years, and as our clients have adapted, so have we. However, staying in our niche of high net worth mortgages for clients with complex requirements has meant we’re not competing with the mass market brokerages.
Diversification is key – we’ve also always understood that diversification is essential for growth, so as our company’s grown, so too have our specialist divisions. This has enabled us to retain clients, by being able to look after all their property and business financing requirements.
Don’t avoid the hard decisions – hiring, trying new things, and changing them if they aren’t working. We’re not afraid of making the big calls and that’s what’s built the company to where it is now.
People build the business – hire the right ones and help them grow and develop is the most recent lesson we’ve learnt. We’re very proud of who we have here and have developed an incredible team.
Watch the pennies – we run lean and spend our money in the most valuable places. Cashflow is an art and needs to be practiced.
Would you say brokers are in a better position now or 10 years ago (before the real downturn took hold)?
IR: Ten years ago, brokers were literally printing money, so, on one hand, they’re in a far worse position, but they’re far more integral to the process these days given the levels of complexity involved in lending. So, for those that have found a niche or have a strong foothold their true value has never been higher.
What will be the biggest issue in the market in 2018?
In the UK from a mortgage perspective valuations in conjunction with changes in stress testing. One or the other would be challenging but both at the same time will be an issue. Internationally it will be the continued consolidation of the major high street and private banks leaving some areas without a clear local lending proposition and lack of access to alternatives. Hopefully, this is where Enness will be able to add huge value with our international reach and vast lender panel.
What’s next for Enness?
HWJ: The next decade is set to be a very exciting one for us, on a global scale. Our international focus and outreach is a huge part of our business, and we are looking forward to further opportunities of lending in many different countries. In ten years, we plan to provide a specialist service to high net worth individuals with complex financing requirements worldwide.
Furthermore, Enness is primarily a high net worth brokerage, but we will look to become even more holistic than we are now, by extending our secondary services offering. Enness Global Insurance, a new broker for HNW international general and personal insurance, launches in October.