Short-Term Property Finance Special

Looking back at your time at Precise in particular, firstly, how do you look back at your time there?

-Just with extreme pride. I got the opportunity to work with Roger and the team there, like six to seven years ago. I look back with extreme pride at what we all built together because nothing comes from one person it is all from the team, so the vision of that company and everything that we did and I had the opportunity to build a team.

I think we had a sales team at the peak of about 20/21 of us, and the myriad of different products that we launched as well. Going back five years or so when buy-to-let limited company was just really coming to its fore because of the tax changes that happened in the market, and we really jumped on that, which leads me to the next part about increasing the distribution and increasing the numbers.

The numbers come from all the hard work and effort that everybody in that organisation put in, and putting specialist lending on the map I think as the whole team did that.

In the role, in terms of working with intermediaries and obviously the various roles that you had, what did you learn, or what did you experience, in terms of meeting intermediaries’ needs that you can transfer over to Glenhawk?

– I don’t think this is a hard job in any way. What I mean about not being hard is that it is about listening. Listen to brokers, ask the right questions and actually listen to what they want. Listen to what their customer wants.

I love listening to intermediaries and what their customers want in the type of products, service as well, and really considering what the broker and customer journey is along the way.

I think that as soon as you think that you’ve got the perfect process, the perfect lender, and the perfect product, then you’ve got to rip it up and start again because there’s no such thing.

There’s always going to be something, whether that be complaints, whether that be feedback, whether that be from the intermediary, or the customer themselves, which allow you to keep on making those marginal gains and improving processes.

I love spending time with intermediaries and just talking to them which is why I’m really looking forward to building the distribution here at Glenhawk.

What was it particularly about Glenhawk that sparked your interest in wanting to join them?

– I was lucky enough to have a few people wanting to speak to me at the time but as soon as I spoke to Nick Hilton, and Guy Harrington, the two founders of Glenhawk, unfortunately for all the other lenders it was game over because of their vision and what they brought from their experience to the table.

I think you’ve always got to take a job that 30% scares you at least. I wanted to learn from Nick’s commercial mindset and the entrepreneurial spirit of Guy and look at what they had done by building up a lender from scratch, in a saturated market as well and bringing on funders like JP Morgan along with entering into regulated bridging as well.

With all these products, where they want to take the product proposition, and not just become another bridging lender, with bridging at its core, and with other products which can serve the customers.

So as soon as I spoke to those two it was done. But then as soon as I have seen the team and spoke to the team, that was when I really thought, “Yeah, this is the right place for me.” Since the day that I agreed to join I’ve never changed my view since. I’ve always been excited by the day-to-day. Definitely a good fit.

Over the last three to six months, what spikes or trends have you seen in the market, positive or negative?

– Now that is one of the most interesting questions because as everybody knows we’ve had a little thing called a pandemic that has affected the world.

I think the bridging cases that have been successful in the pandemic have something in common. The lender, the broker, and the customer entered into those arrangements with a clear view of the entire process, strategy, and exit.

So to answer your question, “What have I seen?” I’ve seen a lot of market activity I need to go in two different directions for this. I could talk about the different dynamics of products that people have taken out, so there’s a lot of commercial activity. Some people are saying that there’s a death of the high street. I don’t agree. I think that the high street is evolving, whether that be in certain pockets where there are smaller businesses and people want to go and support these businesses.

Whether they be bistros, cafés, pubs, shops that are setting up and bridging is being used for that.

Secondly, there were changes in the permitted development rights as well, which allowed more flexibility in what you could refurbish between classes. An example is a commercial unit that had been derelict and you want to change that into a residential. We have seen a lot of these properties change. One business may fail, or the asset itself may fail, and somebody else has seen the opportunity to convert that into something else. We’ve seen a lot of that.

Now the major one when it comes to products is regulated bridging. Many lenders entered into this market for one reason. There is absolutely a demand for this type of bridging.

With stamp duty, there is a lot of these chain-break scenarios where the customers still want to get that asset. They don’t want to rely on the chain which could fall down at any stage of it. So regulated bridging has really kicked off around the industry massively. You have still got your landlords looking at opportunities for that.

Over the last three to six months I’ve seen a lot more liquidity in the market. Pricing is quite topical at the moment. The reason that pricing is quite topical is that there is a lot more liquidity. Funders are looking to support lenders like Glenhawk, including institutional funding from the likes of JP Morgan, Deloitte’s, Goldman Sachs that could help out with that. We are finding that bridging has performed really well over the last year.

One of the things that attracts them is they probably haven’t had the payment holidays that some of the buy-to-let lenders suffered from last year.

Bridging has been seen as a really good area to fund. One of the topics during that period is, “How far is that going to drive down pricing?” Bridging has, in the main, become less complex.

– I know rates are subject to change of course and they’re probably best staying away from, but could you tell us about the short-term property finance solutions that Glenhawk offers?

– I’ve never met one person that ever wanted to take out bridging finance. Not one. But I’ve also not met anybody that wants to have a mortgage but it becomes “the norm” that you want one of those things. What has actually become “the norm” is the asset that you want to buy and what’s your business plan?

That’s why there are 166 lenders and counting in bridging at the moment. It’s not the product. It’s what you are finding as a solution.

We offer lots of solutions for customers along the way. We can do residentials which are our bread and butter. Whether that be a buy-to-let or a smaller HMO. We can do larger HMOs under our commercial range as well. We are very competitive when it comes to the commercial and what we allow. Mixed commercial and also refurbishments. We have got some good things coming up with our refurbishment range which I won’t share now, but we can do even more going forward.

Refurbishments can be for commercial into residential, or it can be a residential that’s derelict that’s being renovated. We can lend, on unregulated bridging, up to 65% of the GDV of that as well. So you can have a hundred percent of your costs provided to you in arrears and allow you to build that property and maximise the yield, or maximise the value of that property, whatever your exit may be.

We have lots of solutions.

Plus I also mentioned previously that we have entered into regulated bridging this year. That is really doing well.

We are not trying to compete on price directly, although the price of the product is good, we are trying to give those solutions to customers who maybe wanted to buy that home to live in that may need refurbishment. Our regulated product will allow you to change a property whether that be under permitted development, or even if it’s got planning already permitted, on that property itself. So it’s not just trying to be the same as other lenders.

My goal, as I was speaking to Guy our Founder the other day, was just about trying to make Glenhawk even better. Every day – even better. And that’s exploring all these different commercial opportunities that we have via the new products.

At Glenhawk, how would you go about pricing a deal? I think what would be of benefit to people is: “What information do you need at the onset to enable you to do that?”

Each lender does it differently as well. Some lenders will have rate cards, and some lenders, when I talk about unregulated, will give the terms out on the back of a fag packet, dare I say.

We want to make sure that we are pricing the deal right at the start correctly, and making sure that we don’t change that price throughout the deal.

Our Managing Director Nick Hilton and I are the two people who price the deals right at the outset. We look at the asset, the client, the purpose, and the general “commerciality” of that deal. Making sure that the exit is right. We do not want to get people stuck onto bridges. We want to make sure that the exit is right.

What can help is giving us a bit more detail right at the start. Some brokers may say, “You really want the A and L’s and you want the net wealth position of the customer?”

My response is always “Absolutely I do.”, and the reason is that:

1. I would expect you to have it so you know you are placing it with the right lender, and
2. I want to price it accordingly.

Now, if you don’t give me all of those things, I may give you a higher price than the one that would actually be right for the customer. A little more detail at the start makes it quicker later on in my view ensuring strong pricing structured at the start via Nick and I.

In practical terms, what are the most common problems that you solve for clients? When should I think, “Glenhawk may be able to solve that problem. “I’ll get in touch with Glenhawk. “I’ll get in touch with Jamie. “I’ll get in touch with the team.”?

– Let’s think of it from the intermediaries’ point of view first of all. So why should they consider bridging? They are so snowed under with buy-to-let, and residentials, those first charge cases. I think if anything has shown us with the COVID and the pandemic is that we need to diversify. How many of us yearn for that night out now, and how many of us yearn to actually diversify what we have been doing even in our home lives? Same with work. You cannot pick and choose the cases that are in front of you or the type of customer that you may want a lot of the time.

So that customer comes to you with that need and you need to be able to present them with a solution. And that solution as a first choice, and not the last chance saloon option, could be bridging.

We provide excellent solutions. An example is when somebody needs to buy from an auction and needs to buy quickly then they can rely on the service that Glenhawk provides.

Typically with these things is the customer will usually go to their broker and say they bought something at auction last week when they only have 28-days to finalise. So the speed that we can perform, and that could be potentially through joint representation as well, means we could actually do that deal quickly for them. Help them secure the asset in time so they don’t lose their 10% deposit on those deals.

Another thing that I’m seeing at the moment is a lot of solutions for refurbishment. As an example say you are buying a property that may be £600,000.

You know the works you want to do, maybe £100,000 – £150,000 worth of work to that property. You estimate that after refurbishment the value of that property, the GDV, will be 1 million pounds.

You can lend against that and convert that property. I’ve seen this a lot with a HMO.

We will remind the brokers to check whether there are the licensing requirements on that type of HMO, whether they know it’s in an article four area, etc.

We want to ensure brokers can go back to the customers with as much information as possible to provide the best solutions back to the clients themselves.

Another example is when I did a regulated case that was slightly out of the norm. Nothing that I would have done with previous lenders that I’ve worked with. It was a doctor’s. A commercial that had permission to change it into residential properties up in Scotland. We lent on that on a regulated basis. Now we lent on that because it had the change-of-use already in place. They were going to have to do some of the conversions to split it up into three flats. We allowed it then to be split up into the freehold titles. Then they could sell the other two properties and pay off the regulated loan themselves. That is not vanilla-regulated bridging, but that shows you some of the deals that we can help out on and provide solutions for the customers. That is not a term deal because it won’t fit on it because it’s a mixture of it’s a commercial, now it’s a buy-to-let and residential. Plus the customer doesn’t want a term mortgage at the end. They want to be mortgage-free.

– That’s quirky for want of a better phrase especially with being up in Scotland as well.

– Yes, Scotland’s definitely a great market that has been under served by specialists over the years. We do England & Wales but we have been looking at Edinburgh and Glasgow postcodes. But that’s not to say that if there’s anything else in the built-up areas or commuter towns we will not look at it. I have lent up there as well. So, Perth is an example of somewhere I lent recently.

Is it fair to say one of the benefits is I do not necessarily need to worry about knowing everything about bridging because, in essence, that’s what you’re there for? As long as I know a little bit about it I can reach out to you and plug any of the knowledge gaps particularly in any bizarre circumstances that land on my desk if you will?

– There are good examples of that Sean, where Nick and I have done just that, especially where it’s a complex deal. It might be a complex deal that needs to be split over separate titles, or we need to put it into separate SPVs and limited companies, and that may be something that’s particular to Glenhawk on a certain deal. Well, guess what? We can speak to your customers with you and guide them through and talk to them about it. So we are very much at the forefront. We don’t hide behind anything. We will talk to the broker’s customers.

Plus we don’t know everything either. We are always developing products. Referring back to one of your earlier questions, we may review a situation and say, “Well that seems to be a new area. Maybe we need to get some new funding and build a product around that.” We have got the excellent Christie Cook, who has come over to head up “Products”. We will always talk to all customers and brokers, and we will educate each other.

If there was a room full of intermediaries they will have their own habits, their own relationships, their own partners. They would be extremely keen, priority, “Plan A” is to make sure that their clients are getting the best service, the best deal, and the best terms. But if they were to think about changing those habits or moving over to Glenhawk, what would it be that you would say as to why they should consider doing that?

– I think it’s a really good question in a saturated market. For me, it is that trust again. It is a case of try us out. What you’ll find from a lot of us, and we’ve done it close to the stamp duty deadlines, we sit here today on the 23rd of June. If I’ve got a deal that needs to complete by the end of June now, I’ll actually tell them, “Don’t put it with us today, because if that absolutely needs to go today, by the end of the month, then I can’t guarantee that. No one can guarantee that.”

I would rather rescue the relationship. I believe it will be based on that relationship and that trust, that what you see is what you get. I can guide you through. I’ve never criteria dumped on anybody. I would rather tell intermediaries about case scenarios where I could help add incremental value to their business.

I would also implore them to speak to the other bridging lenders as well and I’m not in competition with them. The only thing that I compete for is to make Glenhawk better and increase our distribution. Trust, humility, and our desire to work with intermediaries, with my experience, will hopefully give us a chance to build up that relationship.

When people instruct Glenhawk, Jamie, particularly intermediaries who are referring business across, but even generally, what can people do to help increase the turnaround time on decisions and completion? That would be handy for intermediaries to know, even to pass on to their clients as an example, in terms of any tips to accelerate, turnaround time, decisions, completion, etc?

– That is a great question and it’s multifaceted again. There are different parts at different stages that can really speed up the process.

The first thing that the broker will be doing with their customers before even Glenhawk is involved, is to really understand what that customer wants. So we’ve mentioned before, if speed is the important thing then speed is the important thing. If it is securing that asset, but in the cheapest way, then that’s something different.

So, it’s understanding what their business needs are and then really understanding everything about that customer. So finding out about their income, their net wealth, their A&L position.

Finding out about their purpose, their business plan, The goals moving forward. Even finding out what their exits and contingent exits are right at the outset, and then speaking to the BDMs.

There are some excellent BDMs in this market and I’ve got a great team here, which I’m proud of already at Glenhawk, and one I’m expanding soon.

I would say get talking to those BDM’s, and talk through that inquiry and see whether it fits or not. You may think by giving us the majority of the information at the start it would slow down the process but it won’t. It will quicken the process up.

If we know everything and manage to get credit approval on that one bit that you want to show us, then that’s great. Don’t think that you can hide things away. Think of your case and your inquiry in a greenhouse, because when it gets to underwriting we will be able to see every which way but loose from every angle. Let’s make sure that we know every angle right at the start, and make sure we know when you want to complete by, and then we can guide it through.

The second bit to that is having their pack available e.g. the documents. Then you’ll know that they’re on hand to sign everything. You know that you can speak to the underwriter. Everybody can be spoken to here at Glenhawk. That will quicken up the process itself.

Thirdly, I think it’s down to knowing the valuers and really making sure that we know what the asset is and we can get those valuers instructed early.

Finally, the solicitors. Now the conveyancer is a key part. Now, sometimes people go, it won’t surprise you, Sean, for the cheapest option. Now the cheap option doesn’t mean the best. Remember going back to the start and your customer’s needs. Now it may be that the priority is speed. Maybe it was a complex deal, so they know it’s going to be complex. I had a broker yesterday asking me, probably for the first time, a deep question about conveyancers, which I thought was brilliant, “Could you not just tell me which solicitors we are going to be using for this, but could you tell me the level of experience that this particular solicitor has and their experience on these types of deals?” I thought that was excellent because they’re choosing the right conveyancer and lawyer for them right at the outset. The lawyer whom you use for your residential bridging loan with a high street lender is not always the right one to use on a bridging finance deal with commercial, split titles, and you name it on there.

So all of those things will probably save you a few days each meaning you have secured a quicker bridge and also a happy customer.

What is your approach to issues and problems?

I take it quite personally if there’s a problem. I’ve always done and that’s going right back to the start with what I’ve learned in past experiences that allow me to improve the process. Guess what no lender is perfect. So anything that you learn, as long as you improve a process by it, then it’s been a positive experience. I believe the underwriter team is exceptional at Glenhawk and they’ll go the extra mile to try and push things through as well. They are great with communication and will actually talk to the broker and say if it’s not possible, and/or looking at different options that could be possible for them as well. That is one of the things that I’m most proud of when we’re looking at our customer journey at Glenhawk.

I cannot let you go without mentioning the British Specialist Lending Awards 2021 Jamie, you’ve been nominated for head of sales. I was reading that Amy Wareham is nominated for underwriter of the year. Peter Turner is nominated in the business development category, and I believe Nick Hilton has been nominated in the business leader – Bridging Lender category.

Congratulations on being nominated, but what I really want to know is more about the final phase of the process. I understand you go through a 15-minute interview with “a respected industry panel”. Now, to me, that sounds quite scary. Seeing as you won it last year, you must have nailed that.

Firstly, what was the interview like?

Secondly, in my mind, this is like Claude Litner and Linda Plant during the BBC Apprentice interview. Is it like that!?

– Haha yes it can be! Amy, Pete, and Nick they totally deserve to be nominated. Amy is just one part of that amazing underwriter team. So we’ve got Tom, Ruth, Ruby, and other guys who are amazing in there. It just happened to be that Amy was nominated this time. Pete is just an exceptional BDM. If anybody wants to speak to him I would recommend it.

I’m sometimes the person who does the interview as well and I enjoy that part.

As a result, I probably knew what was coming but it wouldn’t surprise anybody to know that I do like talking as well.

It was quite an odd interview because it was one of those moments where it was like I don’t actually really want to be nominated for an award and getting an award at a time when there’s a world going through a pandemic. I felt quite embarrassed about it.

I was quite open when I was talking to them but I just went back through some of the areas that I loved doing over the past year because it is about the past year and everything that you’ve achieved.

COVID provided me and lots of different heads of sales with the opportunity to make sure that the team around them was mentally sound. We were going into something that we’d never experienced before.

I had a field-based team that was now off the road, and some of them were living on their own. So making sure that we had those habits and making sure that they were okay and able to now sell in a different way and relationship-manage off the road was a challenge and an opportunity in a perverse kind of way.

It was lovely to have the award and everything that came with it, but it was my team that won that. It was nothing to do with me because without having that team how could I even, a) be in the position of head of sales, but b) how could I be seen as being a good head of sales? The reason they thought I was a good head of sales is down to how well my team had performed.

In terms of you building that team, I don’t want to use the word opportunity, that’s the wrong word, based on the circumstances you were faced with but did that force you in a way into building a tighter bond with your team or maybe more of a rapport?

You were new in that role and maybe had they been in the field, it may have been business as usual, if you see where I’m coming from on this? Obviously, you haven’t had a choice other than to address various business circumstances because of COVID, but you’ve taken that a step further, which I loved, to go well, we actually also need to look after the mental side of this for everyone, their state, supporting people, which a lot of business maybe wouldn’t have done that had it not been for the circumstances that everyone was faced with.

– That is possibly the one that would make me blush because of the team and how we got closer together. The one bit from my last place that I would most miss, and I knew that I’d miss, which I love, is the team. We were always very close.

They knew that anything that I expected them to do that I would do as well. So I think that’s the way that you have to do it. It’s all in building that trust and just having a really good time and being close in that sense. I hate the word “boss”. I hate the word “manager”. Hate it. So all my old team used to call me “Boss” all the time.

I think that those things that we did every day made us all stronger. Certainly made me stronger I made sure, and I still do here, that we talk all the time. Those bonds that you have with work, I think right through this industry, have been massive. That yearning to go out and see the other people that you have bonds with, the intermediaries and customers alike, It’s just been massive. There’s a massive flow of people wanting now to go out safely and see people.

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