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OakNorth: Why we’re entering the mortgage market

Amir Nooriala, COO at OakNorth | 08:59 Wednesday 8th May 2019

According to recent figures released by the FCA, the six largest banking groups in the UK account for 77% of outstanding mortgage balances.

Yet have limited mortgage offerings when it comes to borrowers who don’t have a regular or established source of income (such as expats, the self-employed, the self-build market or business owners). Private banks, on the other hand, tend to have high entry requirements that are unfavourable to most of these individuals. Lenders are typically unwilling to offer bespoke terms to their mortgage products (for example, capital holiday). 

As a lender that has provided over £3bn in bespoke loans to UK entrepreneurs since launch, we have the necessary expertise and tailored credit analysis models to cater to this unique market, while also having the passion to extend the ways in which we support UK entrepreneurs to grow their businesses and hence grow the UK economy. 

We’ve proven our ability to complete transactions very quickly — weeks compared to the months it takes larger lenders — while taking a customised approach to our lending. That is why we’ve decided to leverage our experience in creating tailored loans for businesses and entrepreneurs to plug this gap and provide our growing portfolio of property investors and developers with mortgage solutions that are attractive, quick, convenient and easy to use.

From today, we will be offering mortgages starting from £500,000 (in exceptional cases loans can be considered above £250,000) providing quick turnarounds on decisions and taking a holistic view of applicants’ finances. We expect to capture up to 5-10% of the underserved residential mortgage market by the end of the year, accounting for a total of around £260m.

We’ve hired three highly experienced mortgage advisers — Kevin Appleton, Matthew McDonald and Mark Howell — to help us achieve this. Kevin joins from the Financial Ombudsman Service, where he helped resolve disputes between financial businesses and their customers. Prior to this, he was a mortgage broker and also spent 18 years with the RBS Group (RBS Bank, Coutts & Co and the NatWest Private Client Group), where he undertook complex credit reviews and applications for new and existing borrowers and managed and built a portfolio of ultra-high-net-worth private clients. He also has an extensive track record working with entrepreneurs having built a private portfolio of more than 600 entrepreneurs, while working as a private banker at NatWest’s Mayfair Commercial Office. Matthew was previously a broker, responsible for generating and transacting business throughout his existing network and by building new relationships with introducers and clients. He also spent 12 years at Coutts & Co, which saw him responsible for managing and building a portfolio of over 200 high-net-worth clients with combined assets and liabilities in excess of £250m. Mark joins from the Bank of Ireland, where he held the position of director of marketing and customer management of UK mortgages.

Through our new mortgages launch, we fully believe we can plug the gap in the market and provide our growing portfolio of property investors and developers with mortgage solutions that are attractive, quick, convenient and easy to use.

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