Exclusive: Glenhawk looking at BTL entry due to more ‘settled outlook’

  • 04/04/2024
  • 0
Exclusive: Glenhawk looking at BTL entry due to more ‘settled outlook’
Specialist lender Glenhawk is considering entering the buy-to-let (BTL) market as the economic outlook is more settled and gaps in the specialist market present an opportunity, a senior executive has said.

In an interview with this publication, Jamie Pritchard (pictured), Glenhawk’s managing director, said that BTL and other product areas have “always been on the agenda to allow us to diversify and meet our clients’ needs”.

He said that upcoming funding lines would help broaden the scope of bridging propositions and go into new product areas like BTL.

Pritchard explained: “Due to the rising interest rate environment and the pressure that this has placed on landlord’s affordability, we have held off entering the market. However, with a more settled outlook, we think now is a good time to rethink this.”

He said that market entry “requires a lot of project planning, including understanding credit appetite, identifying the right products that will benefit landlords and the technology to support the process, building the right team to deliver a first-class service and ensuring we have the optimal funding structure that will allow us to complete on deals”.

“We have already identified gaps in the specialist market that will allow us to differentiate ourselves and enter the market with a proposition that will offer something new, rather than just mimicking what others are doing. All will become clearer nearer the time of launch,” Pritchard said.

He said that entering into new product areas “would not be possible without a clear front end and application system that allows us to manage expected volumes”.


Technology will be ‘key’ for BTL entry

Pritchard said that technology to support loans under managers was “key” and said that it can also improve aspects of the journey, such as identity and verification, allowing the firm to better understand a customer’s credit profile, and help security.

“Technology should, and is, always viewed from a ‘how it can complement rather than replace’ perspective, as well as ultimately how it can be used to lower the risk to us as the lender,” he said.

Pritchard said that Glenhawk was “here to lend and have an appetite to do so”.

“If brokers have not used Glenhawk, I would urge them to reach out to one of my excellent sales team, or I would be happy to chat through the solutions our bridging products provide.

“We have excellent funding partners that allow us to lend at scale and a wealth of experience in this space, from the readily accessible founders of the business, Guy Harrington and Nick Hilton, through to the rest of the team that are here to support brokers and clients alike,” he said.


‘Competition remains strong in bridging’

Looking at other specialist areas that the lender operated in, Pritchard said that bridging was “core” for its business and said that more “new brokers” were coming to bridging.

“Competition remains strong in the bridging market and, as the market continues to mature, it becomes even more appealing for institutional funders to enter,” he noted.

Pritchard said that some BTL and second charge lenders were looking to enter the bridging space to diversify their offerings.

He continued on to say that a “vast number of brokers and clients are still not fully aware of the benefits of short-term funding and how it can support their business and property goals”, so widening awareness through education was key and would further increase demand.

“Regulated bridging continues to be used as a tool to allow downsizing and chain-breaking, whilst the conversion of properties into higher-yielding assets remains one of the most popular uses of bridging,” Pritchard added.

He said that, while the market “may be saturated”, this would only “push service levels amongst lenders to be even better, and could result in reduced pricing as lenders seek volume”.

“A lot of lenders will prosper where others will consolidate – but this is nothing new in the specialist space,” he said.

Another key area for the business is commercial bridging, as commercial assets in some areas of the country have “bottomed out valuation-wise”, so some investors have seized the opportunity to pick up assets for “perceived value”.

“Where commercial term processes may take some time, bridging and the speed of delivery is being used to acquire these properties and, in a lot of cases, repurpose the property. A walk down your local high street and surrounding areas will demonstrate how commercial is changing.

“The permitted development changes and consolidation of the use classes of some commercial (class E) has made it easier for SMEs to acquire and change a property’s purpose (class MA) – making this strategy very viable for smaller investors,” he added.

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