Speaking to Specialist Lending Solutions as part of the Get to Know Your British Specialist Lending Award Winner series, Shawbrook Bank’s head of product development and proposition Darrell Walker (pictured) said that low interest rates had squeezed lender margins for a “prolonged period” and, whilst the base rate had recently increased, it was “unlikely” this would change in the short term.
This, coupled with more lenders competing for market share, meant it was a “case of being the best at what we do or do something new”.
He explained: “In a mature market, doing something new isn’t a realistic everyday prospect, a fact which is reflected in the number of new entrants and increased competition across all of Shawbrook’s asset classes.
“We therefore believe our biggest opportunity, during 2022 and beyond, lies in delivering the best customer experience out there, from strong broker relationships to market leading technology and everything in between.”
The specialist lending market “did not skip a beat” during the pandemic, he said, despite the challenges it presented to the industry.
Walker added that the pandemic had prompted changes that otherwise would have taken a long time to occur, pointing specifically to the heightened use of automated valuation models as a “great example of long-lasting benefit to many”.
He said: “I’m incredibly proud that our doors stayed open, and we continued to lend, albeit with caution, in a time of need. More importantly, we demonstrated resilience, expertise, and commitment to the wider market, continuing to support brokers during very challenging times.
“I still regularly receive feedback from brokers expressing their appreciation, not least because we were one of the first lenders to begin restoring our pre-Covid proposition.”
Walker said that the sector would feel the effects from the pandemic for years after the fact, comparing it to the 2008 financial crisis which he said was still affecting the sector more than a decade later.
“Whatever the reasons though, the people in this industry have shown that those effects can be beneficial in the long term,” he said, “not just for the industry at large, but also for customers.”
Specialist lending market has ‘changed considerably’
Walker added that during his 25 years in the intermediary lending space the market had “changed considerably”, but people were still the “fundamentals and DNA” of the industry.
He said that during the early days the intermediary market was dominated by high-street-type lending, complemented by “vanilla” buy-to-let, adverse credit and self-cert products.
“People reading this who were around 10 to 15 years ago, and I’m sure many of those who weren’t, don’t need me to tell them about the problems some of the activity during that period led to,” Walker said.
However, now there is much “greater focus on the fair treatment of customers at all levels of the industry” and a wide range of customer needs are being met by a “greater number of expert, specialist lenders”.
“As I said above though, it’s the people that make our industry great, and able to adapt and improve over time,” Walker said, “and I, for one, hope that never changes.”