In recent weeks, multiple lenders have thrown new competitive rates into the arena; however, Shawbrook Bank believes it’s no longer about saturation but diversity.
In light of Shawbrook Bank surpassing in excess of £1.3billion in lending this year, Managing Director of Commercial Lending Stephen Johnson discussed the ongoing ‘rate war’ in the specialist finance market with B&C and depicted how in fact, the market craves innovation.
At the recent Property Investor Show, Stephen, said: “Competition is heating up… will that drive rates down any further? Personally, I don’t think it will. It might move some more but I think generally we are getting to the bottom. For banks the capital requirements you have to hold have changed, banks still need to repair all their balance sheets and are looking to do that with retaining some of the spread of the profitability in their lending.
“What I think you will see at long last is a bit more of an emergence of criteria and lenders looking to do different things.
He went on to talk about everyone in the industry fighting for the same sweet spot: “If you’re in the sweet spot it’s a good gig, but you don’t want lenders all wanting the same business, you want lenders trying to diverse the market a little bit, but that’s just my personal opinion.
“We may start seeing innovation in the market, things like lines of credit, which were available from some of the corporate banks, commercial banks to some of their investor clients. Effectively a facility that is granted and brokers can go off and trade with. A hunting line it used to be called, basically know you had committed funding so you can buy and do deals quickly. All that stuff stopped and disappeared in a heartbeat when the banks decided they weren’t so keen on property investment anymore.
“For lenders like us and other entrants that can’t go for completely price-led propositions, it’s about the areas where you can add value. I think that’s definitely got legs like all those kind of niche areas.”
Shawbrook Bank tends to base its updates to service on broker feedback. The challenger bank has expanded its 30-strong Strategic Partner panel by a further two brokers and recently revamped the products available to the panel. Members receive exclusive process and marketing benefits and higher commission rates.
The next expo Shawbrook Bank is exhibiting at will be the inaugural FP Show, being held at Olympia Central, London, on Wednesday, 6th November.
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