Shawbrook doubles commercial lending but says ‘more work to do’ – exclusive

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  • 13/08/2019
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Shawbrook believes it has “vastly improved” its commercial mortgage proposition since the start of the year, but asserted there is still more work to do.

 

The lender told Specialist Lending Solutions that it is also preparing for a “post-Brexit binge” from commercial investors once a decision about the UK’s future with the European Union is confirmed.

Shawbrook overhauled its commercial lending team in January, with Rob Lankey joining as director of commercial investment lending, along with many of his previous team at Amicus.

Lankey said Shawbrook had cut its key service times and had also seen an increase in business being completed.

“We revamped our commercial investment product and launched that in April and since then our business has doubled,” he said.

“We’re not quite where we need to be in terms of service excellence, but we’re getting there. Our service level agreements (SLAs) are down to three days which is a massive improvement but we’re striving to get it down further.

“We’re aiming to give a same day agreement in principle. There’s no reason we shouldn’t be able to do that, and that gives brokers and borrowers a strong indication,” he added.

Lankey’s intention is to provide brokers with a “high-quality conversation at the start of the process” to enable them to make the best decision for their clients.

 

Higher yield, quirky cases

The lender is primarily looking for individual or family investors possibly using a corporate vehicle, and for “higher yield, slightly risky, quirky” cases.

Lankey noted that it is largely interested in offices and industrial space, but is “not adverse to retail” as long as it can understand the project, given the sector’s challenging and dynamic nature.

In this regard, Lankey expects serviced offices to grow in popularity while logistics demand in the industrial sector is also likely to be strong given the UK’s current shortage of such locations.

 

Post-Brexit binge

But the biggest trend the lender is preparing for now is a rebound in the final quarter of the year if Brexit reaches some form of conclusion.

“We are preparing for a Q4 binge and the reason is the mentality and way investors think,” Lankey continued.

“Property investors are the ones who often return first after a shock because they are not put off and are keen to get a good deal.

“The commercial market has been really resilient, rates are still low and there are lots of banks with capital to use.

“We’ve seen a lot of poorer stock hit the market and then buyers waiting for an opportunity.

“And values may not be hit badly as valuers have already been future-proofing ahead of a potential Brexit,” he added.

 

 

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