Together reveals its specialist lending plans in exclusive filmed interview

In an exclusive filmed interview with Bridging & Commercial, Together’s Richard Tugwell, group intermediary relationship director, and Sundeep Patel, head of London intermediaries, gave us an honest view of its lending plans in the specialist finance market.

At the beginning of lockdown, the 45-year-old specialist lender announced it had temporarily halted new loan applications across its product range, and made the difficult but necessary decisions to change the way it operates in order to maintain a sustainable and responsible business. 

One of those decisions was an employee consultation process on proposals to reduce colleague numbers by around 200 people, which was launched in July.

This process has now virtually ended, with most of the impact felt in the sales, service and marketing parts of the company.

“…It has been hard, but we’ve spent the last period being as sympathetic, appropriate [and] supportive as we could be to colleagues that were going through difficult times,” said Richard.

Sundeep emphasised that Together has always had a “highly-skilled” sales and underwriting team, and the lender has tried to retain as much expertise as it could so that it can continue to meet specialist market needs.

In July, the lender stated that, while it was cautiously increasing lending volumes, it was unlikely it would resume its pre Covid-19 activity levels for “some time”. 

B&C asked what product areas they were lending in and whether that thought process had since changed.

“We continued to fund throughout lockdown,” confirmed Sundeep, “but it was with a restricted budget.

“To put that into context, pre-Covid, we funded approximately £200m a month and, last month, that was reduced down to just under £50m,” he explained, “so you can see the impact it’s had”.

Some £45m of that was lent in the specialist finance market, predominantly in bridging.

“[These decisions were] necessary to sustain the business model we want for the future.

“For the short-term, we will focus on unregulated lending — that’s been a core focus for us.

“But our budgets are growing month on month, and that’s across reg and unreg, but we just have to be careful and cautious [about] how we return to a distribution model that’s pre-Covid.”

Richard added that a lot of Together’s lending during lockdown was necessitated by back books, loans to existing clients, and its regulatory obligations—pipeline work that needed to be funded. 

Going forward, he explained it firstly needed to make sure its funding was secure to increase those budgets.

“Secondly, all the things that the market has been showing us over the last few months now needs to be part of how we operate a risk-based lending approach.

“So, making sure that we understand where the market is, we understand what valuations are doing, and we understand what personal circumstances are likely to be changing to during what is a volatile market and, the one thing [that’s] for sure [is], what we think today might be different in a month’s time.

“So, making sure that we keep up to date on that is paramount, really.”

B&C asked whether Together — which has been providing bridging finance through limited distribution — whether it would soon be opening this offering to the wider market.

Sundeep answered that dealing with a select group of brokers allows it to test and implement its automation and innovation tasks that have gradually been dropped into its process.

In July, Together revealed it was accelerating some of its modernisation and transformation programmes, such as further use of digitalisation and enhanced automation, to help improve the journey for customers.

“To give you an idea, we have probably completed about 12 months’ work of innovation and automation within the last five months, so, behind the scenes, we’ve been very busy making our business more efficient to cope with almost a return to high levels of lending,” he said, adding that it was doing this gradually.

Internally, this includes utilising electronic files and working on an AVM that will ultimately speed up the facilitation of loans.

“As our process gets slicker and our budgets open up more, yes, the distribution will widen, but we’ll control it to an extent to make sure that we come back [in a prudent way].”

Richard added that it wanted to work with its closest partners to understand what it is they need and what is going to “hit the spot” with their clients as technology moves on.

“The way you prove income, affordability, valuation etc is slicker than it would have been a couple of years ago, and is going to get slicker still, so we want to move with that as well.”

B&C asked what plans Together has to rebuild market share and develop specialist lending products in order to remain competitive after the hiatus.

Richard said it would need to see how things go with its limited distribution over the “next short period”, and monitor how the market and its funding goes.

Market-wise, he said that when there’s adversity, there comes opportunity.

“Certainly, the auction sales are really busy at the moment, with people sat at home for the last few months thinking, ‘I must get out of here’, so the purchase market [is] going to be quite busy—but is that a bubble or is that sustainable?

“What we must do as a lender is not only grow market share, but grow sensibly, and make sure it’s sustainable from a corporate point of view, but also sustainable from a relationship point of view.

“Our view would be, with a following wind and no hurdles in the way, if this is successful, as our funding lines get stronger, we would widen that distribution.

“But there’s a long way between now and getting there, and we will do it sensibly and appropriately.”

The full-length interview can be watched below.


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