'TML gives us a foot in the door with a new distribution opportunity,' says Shawbrook's John Eastgate

The acquisition of The Mortgage Lender (TML) is set to extend Shawbrook Bank’s proposition into a more mainstream distribution, commented its managing director of property finance, John Eastgate (featured in the video, above).

In late January, the specialist bank made the headlines after announcing it had agreed terms to acquire TML for an undisclosed amount.

The purchase is set to help extend Shawbrook’s property finance product range and enhance its offering to intermediaries. 

The full acquisition of TML — which will retain its brand — follows Shawbrook’s purchase of a minority share in the business in 2018.  

This is the second acquisition by the finance provider in recent months, having snapped up RateSetter’s development finance team and £167m loan portfolio in December.

When discussing the reasons behind the TML move, John said that the bank had identified that there was “great commercial opportunity”. 

Considering it already owned 20% of the business, “it was a question that was never really that far from our minds,” he revealed.

John said that Shawbrook saw the opportunity for both businesses to grow out of the pandemic and give TML the additional strength and value of the backing of a bank and its retail savings franchise.

“Because we had been ‘dating’ for the last three years, it was pretty low risk for us to take it to that next stage.”

He explained that the acquisition substantially increases its footprint in the BTL market and extends its proposition into a more mainstream distribution than Shawbrook reaches alone.

While TML operates with clubs, networks and packagers across the country, the bank has historically worked with a smaller group of specialist brokers.

“Shawbrook will continue to be overwhelmingly dominated by distribution through that small, core [group], but TML gives us a foot in the door with a new distribution opportunity,” he disclosed.

John also shared that it is in the process of using technology to shorten application-to-completion timescales. 

When asked what his thoughts are on how the BTL market will evolve this year and where the challenges and opportunities lie, John responded that, in the long term, property will keep growing in value. 

“The markets that we [and] TML are in are very much [aimed] at the professional investor,” he stated. “BTL landlords are in it for 10-plus years when they hold the property; they’ll see considerable capital appreciation over [that time], and certainly have historically.

“So, getting caught up in the noise of what’s going to happen to house prices this year is really rather pointless. The challenge is about looking [at] the fundamentals that underpin it and making valid decisions to invest for the long term. 

“Property is not a short-term punt.”

The full interview can be watched below.

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