"Moving forward, I think lenders, brokers and borrowers are now more aware and prepared for future material changes in interest rates."
FR: What’s your background and what skills would you say you bring to your role at HTB?
I began my career at Lloyds Banking Group as a management trainee, with roles in retail banking, SME credit and latterly supporting the group’s executive committee. I also worked in institutional banking for three years on group-wide strategic projects.
Having trained at a large UK clearing bank, I was keen to work for a smaller bank focussed on supporting SMEs – the agility, speed of decision making, and opportunity to have a say in the direction of the business I worked in whilst supporting the heart of the UK economy were very attractive. I was also keen to marry up my professional experience with a personal interest in real estate – so that’s when I joined Metro Bank and got first-hand experience of their real estate offering along with what it’s like to manage a portfolio of challenging loans.
At that point, I decided that to gain further new business lending experience I would move to a specialist bank, Secure Trust Bank, as a relationship director based in the Thames Valley.
This role offered me the opportunity to support professional investors and developers with their investment and development finance funding requirements across the UK, with loans originated ranging from £1-40m. I was later asked to take up a new role and build out the bank’s origination capabilities.
Long story short, I come to HTB’s specialist mortgages division with a broad and varied background in banking – from retail to institutional banking, alongside risk and strategy roles – but with a core skill set founded in real estate lending.
FR: As managing director for specialist mortgages, what are your key objectives?
I am tasked with ensuring Hampshire Trust Bank’s specialist mortgage team continues to deliver on supporting and brokers to help them help their clients.
To do this, we have set out our priorities of:
• Building our business – better supporting our brokers by deepening relationships;
• Developing our proposition further - innovating new products and services to support additional sectors and segments;
• Creating the best experience – bringing forward technology and best practice to make sure brokers have the best end-to-end experience of HTB;
• Focusing on our colleagues – continually developing our team to remain expert real estate bankers, but also driving our diversity, inclusion, and charitable activities; and,
• Keeping an eye on emerging risks – whether that be climate change, the cost of living or the wider real estate market.
At the core of our strategy is the evolution of the business to offer loans across a broader spectrum of borrower types and loan amounts.
FR: We’ve seen a lot of turmoil in the mortgage market over recent months. When do you think things will calm down and what’s your market outlook for 2023?
As an industry, we have been used to a stable, low-rate environment, and what happened in September has challenged that notion. Moving forward, I think lenders, brokers and borrowers are now more aware and prepared for future material changes in interest rates.
As lenders work through their customer backlogs, we are seeing them re-entering the market in different ways, and this will create pockets of opportunity for us given we are already operating within SLAs and with a strong appetite to lend.
2023 will see the remainder of the inflation and rate rise story play out but we must remember that the main driver for the property investment market is the structural shortage of homes – as finance costs go up, rents will adjust, and yields will increase.
Pricing expectations with clients may be a challenge in 2023, and whilst swaps have become a watch word amongst our broker partners, they make up only part of a bank’s funding costs. We pride ourselves on being funded by a strong and stable retail customer savings business, but this market is becoming increasingly competitive as the Bank of England base rate increases. Clients holding off for much lower rates in the near future may be surprised if these don’t materialise.
For us as a specialist lender, this means continuing to lend as we did before: to quality investors providing better homes in our communities.
FR: Do you anticipate any major changes in landlord sentiment and portfolio strategy over the coming months?
We are already seeing behaviours change as the final, legacy lower rate offers fall away. Some borrowers are looking at deleveraging by divesting lower yielding assets, with selective disposals to bring up ICR affordability. Its small numbers at the moment, but interestingly those who are selling, appear to be selling to other investors, not to the owner-occupied market.
We are also seeing more high yield purchases in semi-commercial, HMOs and holiday lets, but these present their own regulatory and financial risks and are not for everyone. Inevitably as people chase this higher yield it will compress, and an inflection point will be reached.
Lastly, in times of upheaval cash remains king – those with ready funds to invest will find relative bargains, whether distressed assets or not.
FR: How would you say HTB differs from its specialist lender competitors? What are its strengths?
Our strengths are our differences.
We look at every deal individually, and deals are looked after by specialist bankers from start to finish – there is no computer saying no, and there are no automated messages. You can always pick the phone up to someone at HTB, myself included, and get an update or discuss a case.
With relationship banking falling away in parts of the wider real estate finance market, I am proud that our broker partners can continue to build long lasting professional relationships with individuals in our teams.
Lastly, I would say that we are proud to lend against a very broad range of criteria – large residential portfolios, mixed use, HMOs, foreign nationals, complex borrowing structures; we really are a specialist lender, so give your BDM a call and see how we can help your clients.
