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Q&A with Kensington’s Craig McKinlay: ‘Buy to let is not as complex as it appears’

  • 04/02/2019
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Q&A with Kensington’s Craig McKinlay: ‘Buy to let is not as complex as it appears’
With almost £1bn in funding secured and a new-look brand, Kensington Mortgages has notable growth ambitions. Mortgage Solutions asked new business director Craig McKinlay to outline the key elements of the market as the lender sees it.


MS: There is fierce competition in mortgage lending right now. Mortgage lenders are battling to hit their lending targets with some of the best mortgage deals ever seen. This is great for consumers and brokers – but what is Kensington doing on the product or service side to hit its lending targets? How can lenders flex to stand out from the crowd at a time like this?

CM: Last year was our most successful year since the credit crunch and we are keen to continue our growth. We’ve been expanding into new areas while also doing what we do best – taking an innovative approach to the niche parts of the market that we work in. For example, we have launched new offerings for high earners, young professionals and those in later life, and also expanded our buy to let offering into limited companies.

What we are most proud of, however, is achieving record-breaking sales while still maintaining quick turnarounds in operations and reducing our time to offer.


MS: Kensington was the first adverse credit lender, and one of the few specialist mortgage brands that survived the credit crunch, so what does that give you as a lender?

CM: Our long-standing position gives us the experience, knowledge and, perhaps most importantly, the data on which we base our lending decisions. We are very proud of the fact that we see people as more than just a number. We combine our data with human empathy and understanding in order to help the widest possible range of people at every stage of their life journey.


MS: In buy to let, as property investors professionalise, is the broker market adjusting quickly enough to reflect that? How do you expect the industry to change to accommodate portfolio lending on a mass scale? More premier servicing for landlords? Tailormade rates depending on lender risk appetite?

CM: There’s certainly been a shift towards specialist buy to let brokers and lenders, as there’s now much more demand in this area from limited companies. Smaller brokers shouldn’t miss out on this opportunity, however – buy to let is not as complex as it first appears, and brokers can add significant value to the large number of non-portfolio landlords. There may not be quite as many as there were in the past, but they are still in need of good advice.

On the portfolio side, though, we’ve tried to simplify the process when submitting applications. For example, we’ve removed the business case requirement and no underwriting is needed when examining the background portfolio if the borrower is setting up a limited company.


MS: How does it help you as a lender to allow mortgage advisers to talk to your underwriters? Brokers appreciate the access but why does that work for you as a provider? Plenty of other lenders don’t offer it.

CM: Allowing brokers and advisers to talk to our underwriters is a key part of the service we offer, as we want brokers to feel confident enough in our lending criteria to place their cases with us. Additionally, this access means that brokers can add clarity to cases and provide us with any additional information that we need to proceed. Alternatively, in the unlikely event that a borrower is not the right match for us, it’s really important that we can explain why we have made that decision so that the broker can hopefully place the case elsewhere.


MS: Self-employed borrowers are a growing customer segment – Kensington is willing to lend on one year’s accounts. Why? Will the era of open banking make it possible for lenders to lend on just three months’ accounts?

CM: Self-employed borrowers are an under-served segment of the market and they represent a high-quality lending opportunity for lenders and brokers alike. These borrowers have always been part of our core customer base across both our residential and buy to let ranges. Taking one year’s worth of SA302 accounts allows us to ensure we are lending appropriately and sustainably.

Open Banking and other fintech innovations offer some great opportunities, and we’re already looking at new ways of gathering information to underwrite cases. We’re currently in discussions with some leading industry players to assess how we can make the most of these new developments.


MS: Contractor mortgages. How are these borrowers unique and how do your products reflect that? You offer a contractor adverse credit product, so do many contractors struggle with liquidity or adverse credit?

CM: Contractors are a very diverse group of customers and they vary greatly in their circumstances. For example, we can be flexible for a doctor on a locum contract, even if they have only spent a short amount of time in their new role. However, someone who is moving from one industry to another, or expecting a pay rise, would need to be in the position for a longer period. We see no difference in adverse credit demand from contractors compared to our pool of borrowers.


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