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Perfect storm in capital markets makes it tough to start a specialist lender – Young

by: Bob Young, chief executive officer of Fleet Mortgages
  • 08/02/2019
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Perfect storm in capital markets makes it tough to start a specialist lender – Young
Since the start of the year, the famous Mike Tyson quote – ‘Everybody has a plan until they get punched in the mouth’ – has not only seemed apt, but has resonated rather strongly with me.


You can, seemingly, have everything in place only to get that hit, at which point you have to completely reassess what you have done, what you were planning to do, and put in place a new plan to take you forward.

Our decision to pull our product range at the start of January definitely fits the above and it has of course meant something of a re-evaluation of our 2019 (and beyond) focus, but that is perhaps no bad thing.

As I told those who attended our recent Strategic Partners Conference though, another famous boxing quote is just as relevant – this time it’s from Rocky Balboa: ‘It ain’t about how hard you can hit; it’s about how hard you can get hit and keep moving forward’.

And – you would definitely expect me to say this but it’s true – this is all about what we do next.

My view is our business will be in a far better shape because of the decisions we have made recently, our history in the buy-to-let sector, the quality of the loans we have originated over the last four years, our service quality and that of our staff, and the strong relationships we have in the intermediary space.

That adds up to a lot.

Think carefully about starting-up

However, there are always some areas we cannot control.

In a sense we have something of a perfect storm in the capital markets at present, with cost of funds increased, margins fallen, and a certain political situation meaning a number of potential funders are adopting a wait and see approach.

It means that were you considering setting up a buy-to-let or specialist lender in today’s climate, I might well advise you to think very carefully about doing it.

I certainly would not.

But, we at Fleet are a long way past being a start-up, which is why we are in advanced stages with a number of potential funders with many more contacting us since we announced our decision in January.

One in particular is at the lawyers’ stage and my view has always been that if I believe we can get better terms on our funding then it would be remiss of me not to pursue those talks.

That’s what we’re doing right now and, as mentioned, it will leave us in a much stronger position.


Difficult markets, difficult situations

Clearly, difficult capital markets create difficult situations – and there may be other lenders who are impacted.

However, for us this is the stuff that happens, we are dealing with it, we will get over it, and we’ll be back to market as quickly as we possibly can.

The ‘hit in the mouth’ has come, we’re shaking it off, and ultimately we will come back stronger; actively lending within the specialist buy-to-let sector.

We believe this market will continue to grow in importance due to the demographics of the UK and remains a strong, quality investment for all those who are serious about it, who carry out their due diligence and are, like ourselves, in it for the long term.


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