"The recent difficulties in the market have served as a useful reminder of how important it is for a lender to be reliable."
It feels a little trite to describe the property market as challenging at the moment. The reality is that over the last few years there has been no shortage of hurdles thrown our way, which have threatened to cause real issues for everyone involved, from the fallout of the Brexit vote to the pandemic.
However, there’s no question things have stepped up a notch of late. Ever since the ‘Mini Budget’ last year we have seen significant levels of product and criteria changes across the short-term loan market, making the job of mortgage advisers in identifying the right lender for their client ever more testing.
In my view it has reinforced the importance of lenders being able to offer stability and certainty to borrowers, rather than eye-catchingly low rates which cannot be sustained.
Advisers value lenders they can trust
One piece of feedback we regularly get from advisers is just how crucial trust is when it comes to recommending a lender.
They need to believe the lender can deliver for the client, to provide not just the funding needed but the best possible experience. Ultimately the relationship between the adviser and client will often come down to how the lender performs, so of course advisers need to trust in us to deliver.
The recent difficulties in the market have served as a useful reminder of how important it is for a lender to be reliable. Advisers will have seen cases of all kinds hit trouble when the promised deal doesn’t quite materialise. It may be that in the cold light of day the lender isn’t able to honour the terms it thought it could when first discussing the case with the adviser, or in the worst case the lender’s funding simply is no longer available, leaving the client high and dry.
This obviously causes a big issue with the case in question, potentially causing the project to fall through entirely. But there can be a longer-lasting impact to the collapse of such funding, to the relationship between the adviser and client. When a lender fails to deliver as promised, it can dent the trust the client has in their adviser, causing them to look elsewhere for advice the next time they need to raise funds.
What appears to be a one-off disappointment can have more long-term consequences, making it all the more crucial for advisers to identify lenders who can be relied upon case after case.
Experience counts for a lot
Over the last few years we’ve seen a host of lenders enter the short-term lending space. With the clear levels of demand from borrowers for these funding solutions, this has been a really welcome development. The competition has caused all of us to raise our game, not only in pricing but also pushing innovation in product design, as well as forcing us to go further in delivering on customer service.
However, as things have become more testing, not all of those new entrants have been able to remain so active. Whether it’s funding pressures or heightened concern around risk, there have been lenders who have found themselves unable to provide promised funding, leaving the client in a bind.
Experience is crucial here. Lenders like Tuscan who have been through other challenging periods in the property market are able to take a more informed view, finding ways to ensure that even more challenging cases can still be resolved satisfactorily. It comes down to looking at individual cases and working out how it can be structured that still works for all parties.
Having reliable funding is obviously a huge selling point, as advisers know Tuscan will always be able to hold up our end of the bargain, but just as important is having a proactive team that wants to make deals work rather than find reasons to say no.
Getting it right first time
When borrowers are left in the lurch, advisers need to find a new funding partner and that’s when thoughts often turn towards the lenders who are the most reliable and trustworthy. After all, once bitten, twice shy.
At Tuscan there have been a host of cases recently where we have been able to pick up the pieces and help the client, but the truth is that this isn’t always going to be possible when having to step in at a later and later stage.
Advisers want to keep the stress to a minimum for their clients, and find funding they can rely on from the outset. That means working more frequently with experienced and stable lenders, who have a track record of certainty, from the outset rather than turning to them if and when a lender with less experience inevitably finds themselves unable to help.
