We don’t want to be so specialist there are gaps in our products – Hodge’s Kevin Beevers

Speaking to Specialist Lending Solutions, Kevin Beevers (pictured), managing director of commercial lending at Hodge, said the bank had historically targeted a certain type of borrower. However, the impact of Covid on the commercial property market and a realisation of the growing appetite for mixed use and residential assets has caused the lender to rethink its target market.

Now, as well as offering commercial loans against properties like office blocks, industrial estates and retail parks, Hodge will lend against student and retirement accommodation.

Alongside its commercial offering where it issues unregulated loans, the bank also has a heavy footprint in the later life and holiday let loans markets.

It hopes that allowing commercial borrowers to lend against assets with a residential aspect will enable clients to make use of the bank’s different divisions, for example, those who want to retain residential assets after completion and transition to BTL.

He said: “We don’t want to be so specialist that we leave huge gaps between our various products. We want to be specialist with products to suit everyone on the real estate spectrum.

“We [used to] say we were a specialist lender, but what we were was a specialist residential property lender. Now we’re a specialist property lender because we’ll look at commercial property both as an investment play and development play.”

Over the last three or so years, Hodge has worked to reposition itself in the later life lending space through its retirement interest-only products and is now going deeper into the commercial arena.

“Whether you’re the smallest or most simplistic case on one end, right up to someone who’s borrowing £10m for a development, Hodge has the specialist niches for those along the spectrum,” Beevers said.

The feel of a private bank

Beevers said Hodge’s aim was not to dramatically increase its market share or to dominate the UK market, but to better serve its experienced and “serially active” commercial clients.

In terms of how it will stand up against competitors old and new, Beevers said as the bank already operated in the commercial market for more than two decades, so Hodge was “certainly not starting from scratch”. He added: “We’ve got a good positive base.”

He said the bank had an existing client base and knowledge of the market which it could build on.

Beevers said: “It comes down to service, we are specialist in what we do so we are knowledgeable and accessible.

“We’re not a large bank compared to others in the UK, but that has a lot of benefits. We have a short line of communication between myself, credit function and people in the field. It’s very easy to get decisions and issues resolved, which is what our entrepreneurial clients really like.”

He said clients who operated in the space often had significant capital and extensive experience in the property market, so preferred to work with a bank where they felt they were in contact with decision makers.

Beevers said clients did not “want to feel like a small unimportant cog in a big organisation’s wheel”. He added that from experience, clients “like the feel of dealing with us.”

“We think we can grow our business profitably, safely and attractively within that market,” he added.

Beevers said the response to the bank’s launch of its investment product in March, followed by the widening of its commercial criteria in April had been met with positive feedback.

He also hinted at further “innovative” products coming down the line.

Beevers said this was indicative of “where we see a real opportunity to help the right sorts of experienced, active clients”.

A comprehensive approach

Beevers said Hodge would not be “prescriptive” on certain asset classes and was prepared to look at cases on their merits.

He said this was because some assets did not initially seem to be lucrative or attractive, but factors such as location and the client’s experience could overcome this.

Beevers said Hodge remained “open minded and will consider most things” and rather than give prospective borrowers a straight “no”, would aim to explain why a case does not work.