Lorenzo Satchell, Southern Divisional Sales Manager at Lancashire Mortgage Corporation, discusses the  lender's new funding and it's effect on lending volumes and product innovation.

The new funding recently announced reflects well on our business model andthe quality of the management team, staff, and of course, quality of our lendingbook. Yes, it also means more funds to lend through our broker partners, but at the same time we need to be fine-tuned to the market with product innovation and choice and maintain quality.  

As we have ambitious growth plans, the funding will help us meet those targetsand from my point of view as a Divisional Sales Manager, maintaining and improving service levels as demand in the market grows for our products, is also crucial. Our field sales team cover all of mainland UK and we have a growing Head Office sales team to help service the increasing demand from brokers.  

Market Overview 

Lending in the key areas Lancashire Mortgage operates in have grown as the wider economy improves. Therefore, demand for specialist finance that can be available quickly is a must. Mainstream banks are still not lending to businesses to the level required to keep pace with demand, so the role of specialist lenders is crucial in providing a funding stream in to the buy to let, commercial, semi-commercial and bridging loan sectors. In all of these areas there have been huge increases in lending volumes in the market.   

It’s not just the volumes that have ramped up though; it’s also the growing number of purposes clients are now using the finance for.   

Our recent road shows at the beginning of the year, have proved useful inhelping to educate brokers to spot opportunities that they may not have realised were possible and so increasing the number of loan applications and completions.  

Product Innovation 

This is something which we are constantly reviewing. We take the feedback direct from the intermediaries we interact with and feed into discussions internally to ensure we are moving with the required demands from our brokers and their clients and continually identifying new business opportunities. 

The new funding and the growing demand for bridging, commercial and buy to let, means more competition therefore we have to innovate not only to compete but to cater for the greater diversity of client profiles, property types and income sources. This is also helped by continuous feedback from our brokers and working together to deliver the products that their clients are now looking for in the growing market.  

Since the acquisition of the new funding, there are a number of key product areas that I’ve had increasing interest and discussions about with brokers,generating further new business as a result.  

Buy-to-Let 

An area of the market I’ve witnessed growth in first-hand, is the Buy-to-Let sector. With the rental boom continuing, the demand for our buy-to-let products has resulted in a significant increase in lending volumes.   

Such properties are also being snapped up by older buyers looking to boost their pension income. Particularly as investment rates remain low and with the recent budget announcement that from next April the pension pot can be accessed as a cash lump sum, possibly fuelling this demand further as rental yields are outstripping savings and annuity rates.  

I’m also seeing property auctions becoming increasingly popular, posting theirhighest figures since the credit crunch in 2007, with many of the purchasers acquiring buy-to-let properties for rental. Indeed, we have launched a new brand, Auction Finance 4 Brokers, which provides market-leading products and asimple process for brokers to place cases when their clients are buying atauction and need finance quickly. 

Larger Loan Sizes 

Being  based in the south, I see how the demand for larger loan sizes has increased recently, as confidence has stimulated businesses to grow and withland and property values increasing, the demand for loans of up to £5 million, are a good barometer of a commercial upturn. These loans have been used for commercial acquisitions, land and completing property investment projects,where we have an increased appetite for larger loans, as historically we may have been perceived as funding smaller ticket values.   

It’s great to see a lot more activity in the market. It makes my life quite hectic but it’s exciting times both at Lancashire Mortgage and in the specialist lending sector. By maintaining product innovation and good relations with brokers, we can increase business levels and help more clients with more diverse needs forthe finance they require to move forward.