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Exclusive: Bluestone Mortgages hits £2bn lending milestone

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  • 26/09/2023
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Exclusive: Bluestone Mortgages hits £2bn lending milestone
Specialist lender Bluestone Mortgages has reached £2bn in new originations, helping over 20,000 customers, with further growth and recruitment on the horizon.

Speaking to Specialist Lending Solutions, Reece Beddall (pictured), sales and marketing director at Bluestone Mortgage, said that the firm had seen growth in “all areas” but there has been a “slight increase” in three-year fixed rates.

He noted that over the past few years the majority of business was split between two and five-year fixed rates but three-year fixes had grown in popularity, with the product doubling in the last three months for brokers and customers.

“Generally, brokers would ideally want to put their customer on a mortgage for two years to repair the credit and then remortgage out or if it was tied to affordability then put them on a five-year fixed rate as there would be no stressing on it.

“The way that the market’s moving at the moment, three-year swaps can be cheaper than the two years, so it is suddenly becoming a viable option for some brokers out there,” Beddall noted.

Beddall said that he expected the lender would hit its next billion origination milestone quicker as market conditions have improved and it would be utilising Shawbrook’s capital base.

He continued that the lender was planning further product development in the next six to 12 months around affordability and helping first-time buyers, aiming to launch at the end of the year and beginning of next year.

Beddall said that the lender was recruiting 25 roles across the business in its Sheffield and London office to “support the business’ strong growth trajectory”.

On the sales team, he said that there were nine new heads and it was also recruiting four new field-based BDMs in new field base areas in the North of England, Midlands, London and South East.

This will bring the field-based team from three to seven, with Beddall adding that it was “essential” to expand its field-based presence due to its “growth aspirations”.

The lender is also growing its headcount in its telephony BDM team and broker support team.

 

BTL exit a ‘strategic decision’

Beddall continued that it was “good timing” for the Shawbrook acquisition, which completed in June this year, noting that it had been a funding partner for the last five or six years.

“The way the markets are moving at the moment, it would have been hard for us to maintain a strong position with swap rates where they were, affordability challenges and the rates we had on the table would probably price us out of the market,” he noted.

Beddall continued that the exit from the buy-to-let market was a “strategic decision”, as Shawbrook and its subsidiary The Mortgage Lender were active in the buy-to-let space, and it had always been a more residential-focused lender and buy-to-let was a “small portion” of its business.

He noted that it was a “smooth transition” in exiting the market and that it had “helped us to have clarity on where we are going as a lender”.

Beddall said there had been a 90 per cent increase in business volume post-acquisition, with a key factor being price. Conversion has also increased particularly on the DIP to application-side, he added.

He added that one of the biggest selling points for the lender was that it based its criteria at the point the loan completes, rather than when the application is submitted.

“This allows us to increase the speed in which we can help our clients remortgage or move into their new home,” Beddall said.

 

‘Most challenging’ times for non-bank lenders but light at end of tunnel

Regarding the specialist lending landscape, Beddall said that the last 12 to 18 months were the “most challenging” for non-bank lenders.

“If they’ve survived through that then it’s only getting better from here,” he added.

However, he noted that it would be “dependent on stance in the market”, noting that new lenders could find it “very challenging to enter the market and build a brand”.

Beddall said that Bluestone Mortgages had never been a rate-driven lender and its proposition had been geared towards offering solutions where high street lenders say no.

However, market conditions in the last 12 months affordability of customers had been impacted and due to the rising rate environment “rate and affordability have come hand in hand”.

Beddall noted that an opportunity for non-bank lenders could be innovation around affordability models to provide solutions for clients who currently struggle to get a mortgage due to affordability challenges.

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