Stephen Johnson, Managing Director, Shawbrook Commercial

FR: Tell us about Shawbrook Commercial and what it is you do there?

Shawbrook’s Commercial Mortgages is one of five businesses within the bank. We specialise in providing short term loans, refurbishment, buy-to-let, specialist buy-to-let, commercial investment, and trading business mortgages. All our business is submitted through our panel of brokers, and the clients themselves are either property professionals or trading business SMEs.

Commercial investment is very different to residential but we are consistent in placing great emphasis on the client, and on their financial circumstances and prior experience in particular.

This holds true for us too: my team and I would like to think of ourselves as very experienced in the commercial mortgage market. By working hard to listen and learn from our brokers, we believe we are close to the ground in terms of the market dynamics and where our businesses strengths and opportunities to improve lie.

FR: How is your relationship with intermediaries?

We provide both mortgages and short term lending exclusively through brokers. We therefore try to work as closely as we can with them. We invest time in attending and presenting at investor and business shows – mostly to raise awareness, but also to sell the benefits of a professional broker for support and advice on business financing.

We have about 60 staff in the commercial business and completed just over £400m of new lending in 2013. Quite significant numbers, if you consider it’s been just two years since our rebrand, and about two and a half years since the start of business, as we traded for a little while under the old bank name.

FR: What makes you stand out from your competitors?

Hopefully our model – dedicated underwriters, genuine experts, looking at loans on their individual merits, not tick-box credit scoring. This lends itself to more established property investors who have potential outside of the retail mortgage market, and we cover more specialist areas so can assist with everything from portfolios to commercial properties to semi-commercial properties.

If you’re a good investor or property professional (sensibly geared with a good track record) and can’t quite get what you want in the retail mortgage market, we are likely to have a solution.

FR: What plans do you have for the upcoming year?

This year’s plan is pretty ambitious. Our strategy is quite simple: we want to find all the niches and specialist areas in the market where we think there is good credit risk but also sensible returns.

That’s why we are always looking at angles; we are looking into doing heavier refurbishment lending, for example. And of course, finding niche areas in the market means that not everybody is crowding into the same space and fighting for the same business and cutting rates – that for me is not the right strategy and leads to many of the problems that caused the financial crisis of 2008.

That is very much our model – we want to make sure we get the service model right and execute that model efficiently. That is how we want to compete. We want those relationships with our clients and our brokers to be genuine business partnerships, not just the provision of a product.

FR: What would be your top five tips for property investors in the current market?

My top five tips for property investors in the current market are all the same – be ready for interest rates going up. For tips 2-5, see tip one!

Like all things relating to leverage and debt, sensible levels can really excite your returns and make your money work hard. If you get carried away and over-leverage you destroy everything. Interest rates can’t go lower – they have never been this low and we have had this period now for three or four years. Mortgage rates are as low as they have been in anyone’s lifetime and if you look backwards, we have never had such low customer finance rates. Money is currently ridiculously cheap, and people need to make sure when we get back to a normalised environment (which will happen and what’s more it will happen quicker than people think) that the economics will still work.