"Even before the challenges of the last 18 months, we saw debt consolidation as one of the biggest drivers of growth in the second charge market."
We spoke to Emma Cox, sales director for commercial mortgages at Shawbrook Bank, about how the commercial mortgages division can support advisers and why second charge mortgages will continue to be relevant post-Covid.
CR: Tell us a bit about your role at Shawbrook and how the commercial mortgages division can support advisers.
I’m responsible for the sales strategy as it relates to originations across all our markets, oversight of the extensive Shawbrook relationship team and, in conjunction with my fellow ExCo team members, responsible for pursuing additional growth opportunities for the business. The division, and the Bank, has a long history of championing the broker and adviser market, distributing all our products via this channel and investing in a range of initiatives to support not only their journey with us, but also the experience their clients have with Shawbrook. With an exciting range of projects in flight, we have every intention of continuing this support with brokers being an absolutely fundamental part of our success.
CR: Why will second charge mortgages continue to be relevant post-Covid?
Even before the challenges of the last 18 months, we saw debt consolidation as one of the biggest drivers of growth in the second charge market. This has only escalated for obvious reasons, and with the regulator looking more closely at credit companies and persistent debt levels, this trend is unlikely to slow. We are also seeing more and more people looking to add value to their homes with the help of a second charge mortgage – whether that is providing some office space to accommodate the increase in the hybrid working from home model, or putting in some additional outdoor space, this funding option is a good one in support of these changes and will only fuel further growth in this market.
CR: How can the sector continue to ensure it secures and supports talent?
Given its growth trajectory, the sector will naturally attract talent. However, in its own right, the second charge market is a specialist lend and requires expert people to support the complexities associated with this type of funding. The growing importance of technology will also require lenders to build talent density through throughout their teams, ensuring a good balance of expert people and progressive tech to help ensure a positive customer and adviser experience.
CR: Why is it vital not to lose sight of the customer in such a competitive environment?
The general rule is always to put the customer at the heart of everything that we do. If you can land this outcome and then reverse engineer the ideal process from there, you’ll be in a pretty good place. The nature of specialist lending also means that the customer is often as fundamental to the transaction as the asset, so great service that delivers a great experience is absolutely vital.
CR: What opportunities and issues do you think SMEs will face in the next twelve months?
Clearly, recovering from the pandemic will be a key challenge, and what this recovery looks like across the financial landscape in the short, medium, and long term remains to be fully understood (although early signs are positive). Forward thinking, innovative business that have learnt some hard lessons will be well placed for success once we return to some semblance of normality. While the fallout from Covid in the more traditional funding sense may be felt more acutely, the specialist market, one that thrives on complexity, has shown remarkable resilience over the past 18 months and will be well placed to support SMEs throughout the recovery period.
CR: If you could see one headline about the commercial lending market in 2021, what would it be?
“Renting is the new owning. Professional investors continue to thrive by providing affordable, high quality, environmentally sound rental property, supported by both traditional and relationship-focused specialist institutions.”