What advice would you have for a broker looking to move into the commercial space?
Know your client and manage their expectations.
Every deal in the commercial sector is different, and in particular the requirements of the client. We still often receive enquiries that aren’t even close to fitting what would be a “Regentsmead deal” or transpire to be very different to what was originally presented to us. Whilst it’s part of the brokers job to ‘sell’ the lender it’s also vital the client is realistic about what to expect. The cheapest rates probably won’t bring the quickest service or the most flexible terms. If the broker can understand what makes the client tick as early in the process as possible they are much better positioned to place the deal.
We are sometimes introduced to clients who have been lead to believe they will get the cheapest rates in the market from us. Whilst we are one of the quickest lenders out there it’s unlikely they will get the lowest rates from us, so if their expectations have been managed we are much more likely to do the deal.
You recently published some research showing that developers are unhappy with lender service – what can brokers who work with developers do to help?
Whenever we have a room full of developers we can’t help but do a bit of market research and we were quite surprised to find that a large majority of developers we surveyed had never received good service from a lender.
I think one of the issues is that a lot of developers can be lured by a headline rate. It can sometimes even be a case of one-upmanship amongst developers to see who has access to the cheapest source of funding but realistically this isn’t going to have a direct result on how successful their project is.
This is where a good broker adds value when they are able to explain to the client the entire offering from each lender, and not just the rates involved.
What do you foresee for the next 12 months in commercial lending, now that the General Election is out of the way?
I’m certainly glad I’m not a betting man but I think we will see more of the same (hopefully). We saw a small surge after the election, particularly with the higher end properties that perhaps would have been subject to various taxes had the election result gone the other way, but otherwise we hope the market will continue as it has been.
I think we will carry on seeing LTVs creep up and rates lowered however the lenders that take the ‘tortoise’ approach rather than the ‘hare’ will tell you that the market will inevitably turn and it’s not so much a matter of ‘if’ but ‘when’. Markets respond to uncertainty, and with the Grexit looming, and growing geopolitical concerns in Russia, Iraq and Syria the future isn’t as rosy as some are making out.
What prompted you to begin a partnership with the Federation of Master Builders, which you announced earlier this year?
The FMB is very widely recognised and well respected organisation. They have been around since 1941 and represent several thousand builders up and down the country. Having been around for over eighty years ourselves it’s vital that the partners we align ourselves with have a similar outstanding reputation and the FMB have this in abundance. This forms part of our ‘Get Britain Building’ campaign which the FMB are also committed to. When we first met with them they told us the number one issue their members were experiencing was a lack of access to finance so we are now recognised as their lender of choice whilst a lot of our current clients have been made aware of the benefits of joining the FMB. Their Chief Executive Brian Berry is already a Regentsmead TV star and now regularly contributes to our ‘New Developments’ publication.
What is one thing brokers might not know about Regentsmead?
A broker will always receive a repeat fee for introducing a client, even if the client comes back to us directly. Despite being extremely hands on in the way we work we think it’s vital that any introducer retains an interest in a client introduced. Just last week I was able to ring up a broker and tell him a client he introduced 18 months ago had just agreed another project with us and his 1% was already in his account. It took him a while to remember who the client was but he got there in the end!
I also feel obliged to give a shameless plug to our in-house charity Rosetrees Trust which we operate alongside our lending division. Rosetrees fund medical research projects across all major illnesses and not many people know that we have this charity in-house and they now have a dedicated section on our website too.
