This month, we are sitting down with Andrew Bloom (pictured), Masthaven Finance’s CEO and owner.
How did you get into the mortgage industry?
I’m guilty of falling into the mortgage industry by accident. I started my career at KPMG, where I qualified as an accountant, and left at 24. I then worked in several traditional city-type professions, including mergers and acquisitions.
I also worked in private equity and I worked for the investment arm of a very high-profile individual. We purchased a range of companies, including Watford Football Club and a large chain of nursing homes.
Then one of the deals I was working on was a lending business, and it always intrigued me, so I learnt about mortgage lending that way, then entered the specialist lending business in 2005 when I launched Masthaven Finance.
Aldermore Insights with Jon Cooper: Edition 10 – The biggest barrier to homeownership isn’t affordability. It’s outdated lending.
Sponsored by Aldermore
How has specialist lending changed over the past 20 years?
Some things have stayed eerily similar, and others have been very different. Consumer lending is totally different, predominantly due to technology such as APIs, credit analysis tools and open banking, and the quality of the data is vastly superior, so the quality of decision-making as a whole is far more analytical.
What hasn’t changed anywhere near as much is the development finance side, so somebody meets someone, then reviews a site and assesses the competency of that individual in order to build that site, whether it’s a very complex site with a large number of units, or whether it’s just one house for them to live in themselves. They assess the competency of the individual, the attractiveness of the site, and the complexities of the build programme.
There is a difference between value and desirability; you could have a popular Home Counties house that could sell three or four times per year, or you could have a rural house in Cumbria that could take two years to sell, but they are both worth the same amount.
Development finance is very much focused on that skill, where the secured loans and also, to an extent, the mainstream mortgage market, are much more data-driven. The old-school development finance, and some of the bridging loans, are less about data and still all about people, brokers, intermediaries and their bespoke requirements.
The specialist lending market is certainly moving towards being technology-led – for instance, having automatic valuation models (AVMs) – but it’s moving more slowly, and technology is less prevalent.
What has been the biggest learning over your career?
I think the biggest learning has been how important other people are. The market really is a chain, it’s about valuers, solicitors, brokers and partnerships on the marketing side. You’re only as good as the weakest link in that chain, and that understanding that it really needs a collaborative effort, and there are many stakeholders who are all crucial. If you are one of these people who only look internally, then you’ll find it much harder to be successful, or your success will be limited compared to someone who tries to look externally.
Masthaven was acquired last year and combined with Spring Finance. How have the first few months been?
We were a very successful non-bank lender. We weathered the global financial crisis in 2008-10. I was the majority shareholder, and then William Pears Group bought 40% of the business from me. We did really well and then we decided to become a bank, so two-and-a-half years later, I managed to get the banking licence. We then very quickly grew to a billion-pound balance sheet and more. Then I sold the business to a large American private equity company called Vardé Partners, and that was my time done. In April 2020, I had done 15 years and I thought that’s it and my entrepreneurial journey relating to Masthaven was over.
But little did I know that Covid-19 was going to bite and that the American private equity company would decide to sell Masthaven Bank. The biggest part of Masthaven Bank was sold to Starling Bank, but they just wanted the mortgages. They had no interest in the branding nor the short-term lending division, so I bought back what was left of the bridging and development finance book, and then I put it together with a second charge lending business called Spring Finance, which I bought a few years earlier. Then, in February 2025, I merged the businesses together under the Masthaven brand.
My first task was to get my first 50 hires right. It’s really important in business to get that first 50 correct, because if you hire a good 50 people, they then hire good people, and so it multiplies out. About half of that first 50 were ex-Masthaven staff, which was nice. Some of them I’ve worked with for many years, so that’s lovely. The broker response has also been strong, but as with everything, they need to do what’s right for their customers, for us too, so it’s up to us to make certain that we do everything we can so that we’re the best option for their customers.
What are key areas of growth for the business in the next few years? How will Masthaven set itself apart from the competition?
We’re doing exactly the same products as we always used to do, which is first and second charge mortgages, buy to let (BTL), owner-occupied, bridging and development finance. The only difference is we’re going to be funded by wholesale funding lines and securitisation rather than retail savings. We have a product roadmap, some of our products have already been launched, and there’s others still to come.
On the funding side, Masthaven secured around £100m in funding from Macquarie. What is the funding strategy going forward?
I’ve been the CEO of a bank for four years, and in addition to that, I spent two-and-a-half years getting a banking licence. I’m one of the few people who’s been CEO of both a bank and a non-bank mortgage lender. From my point of view, specialist lending sits much better within a non-bank environment than a bank environment.
The reason for that is very simple. The bank is lending retail savers or current account customers money, so they absolutely need to have various safeguards in place, because, ultimately, if even a small bank goes under with a £5bn balance sheet, then the government has to pick up whatever loss there is, because almost everyone is under their FSCS guarantee for savings.
In that kind of environment, there should be, and there are, far more rigid safeguards, so when you have those kind of organisational safeguards, it makes a specialist lending market hard. I’m not saying it’s impossible. There are some good bank specialist lenders, but if you look at bridging, for example, most of the banks just go for the cheapest possible rate. Very few, if any, of them are true specialist lenders. They just go for the cheapest, most vanilla, most cleanest possible bridge and just fight it out at a very competitive rate, where there’s others like us, which can spread across the whole spectrum and become what I consider a true specialist lender.
Looking at the specialist lending sector, do you think there will be consolidation/does Masthaven have M&A appetite?
I can see the banks buying small, medium-sized, non-bank specialist lenders because it gives them access to a new lending market, and it also gives what they’re buying a lower cost of funding.
Within the non-bank lenders, what’s the motivation to merge? Are there economies of scale? Is it we’ll come together and our funding will be cheaper? Is it that we can cut overheads? Not massively. So, the specialist lending market will have a whole host of small and medium-sized players, where it’s a long book will be measured in hundreds of millions and then there’ll be a handful of bigger players who have balance sheets in the billions. Sometimes, a big bank like Barclays will buy Kensington, sometimes there will be a larger transaction, but Barclays buying Kensington is exactly the same as a smaller bank buying a smaller specialist lender, but I can’t see significant consolidation within the non-bank lending market at the moment. There’s just not the economic rationale to do it.
I’ve already bought two loan books, one for secured loans, and one for bridging and development finance, and I am on the lookout for other books, but our main growth will be via product launches, improved technology and lower rates.
What is the current headcount of the business and are there plans for further recruitment?
Every division is hiring, so we have staff joining pretty much every month, sometimes it feels like every week. We’ve just gone past 50 hires. We recently moved into a new office, which seats 80 people, plus we’ve got the option on the floor above and the floor below, which is 80 on each floor. We are growing significantly; our financials and our loan book are absolutely heading in the right direction, and with more products on the horizon, so we will continue to lend and go about our business.
What is Masthaven’s strategy around distribution? How many brokers are you working with currently and is there an ideal number in your mind?
Brokers are the lifeblood of businesses like us, so almost all of our lending is via the intermediary market. We need to give brokers options so they can source the best deal in the market for their customers, so for us, it’s just building our client base, hiring more staff and building relationships with more brokerages.
What would you want the mortgage industry to know about Masthaven?
The key takeaway is that we are very much a specialist lender. So come and speak to us; we’re here to lend, we’re here to do deals. All our products are there in order to provide solutions for their customers who may have complex income or may have some quirkiness or unusual aspects – whether it’s a chain-breaking bridge or whether it’s a second charge mortgage, we’re very much here. We’re very much growing and we are looking to get Masthaven back to where it was previously as a non-bank lender, and then continuing onwards and upwards.
