The 30-strong development team is set to launch this summer as it evolves into Masthaven Bank and will be headed up by its new managing director of development finance, James Bloom.

In an exclusive interview with Bridging & Commercial, James, who joined the team in early July after 29 years at principal development lender Regentsmead, explained that while Masthaven has previously dipped its toe into the development market, it has its eyes set on becoming a mainstream development provider.

“We want to become a go-to development lender to compete with a number of the secondary banks that are very well entrenched in that space already. 

“That has got to be the aim – to get the development business to the same sort of level as bridging, which will take time because Masthaven is known in the short-term arena as a bridger.” 

James expects its new short- and long-term development products, which will be even more competitive within the industry, will bolster the ambitious move.

“We will be strong on new build, conversion, refurb – there will be a product that covers everything,” James said, adding that the division will be taking advantage of other parts of the business in order to be more innovative with its products.

While James is no stranger to development lending, he will be brushing up his skills on other types of lending for his new position, including regulated loans, which he described as a “real learning curve”.  

“As well as imparting my knowledge into the business and helping to substantially expand … I’m learning … I have been aware of MCD, regulation, compliance, all sorts of other things, but now I need to understand [it] because they have a direct impact on the business that I am running.”

Will Brexit affect Masthaven’s plans?

James left Regentsmead shortly before the EU referendum result was revealed, and therefore has had to think on his feet about how his new division will work in a post-Brexit environment.

“It is an uncertain time and we are watching and waiting … you would be absolutely crazy not to take that into account in lending decisions – it’s very important that you look at how that could affect the market and future saleability.” 

James explained that he had recently seen valuers attempting to put caveats in their reports to limit their liability for any post-Brexit issues that could affect the market.

“As a firm, we won’t possibly accept that in any reports that we get because you have to be able to rely on your valuation – it’s a fundamental part of your lending decision. I don’t think there’s been an across the board ‘let’s reduce the price’ [decision] yet, but I think we have got to take a lower-end perspective on the valuation.

“I think it is important to stress test your valuations and just say ‘what if’ the market does come off by 10, 15, even 20% and just look at it. It is not necessarily adopting that as a value, but it is worth looking at that and just saying, ‘Where would it leave us?’”

Will ‘big bank thinking’ restrict an entrepreneurial approach to lending?

As well as having to analyse the turbulent economic market, James also has to adjust from a boutique principal lending way of working to big bank thinking.   

James explained that as an executive team, they all understood the importance of making sure that Masthaven continued its specialist lending principles throughout the business when it becomes a bank.

“Yes, we will be a bank, but actually we will have the heart of a short-term lender.”

“If we became a bank in perhaps some of the traditional connotations, I think we would lose the spirit and ethos of the business.”

The reason for leaving

James shocked the industry when he left Regentsmead to join Masthaven, however, he believes the new role, which he compared to being asked to play for a Premier League football club, will enable him to go as far as he believes he can. 

“It was just too exciting to turn down,” James said.

“I didn’t want to read about the Masthaven success [over] the next five years – I wanted to be part of it.”