First published 25/04/2023.
Q&A The Intermediary catches up with Brian West and Andrew Gardiner from development and bridging specialist Saxon Trust, to learn more about their exciting growth plans and to understand what exactly differentiates them from other lenders.
It’s just over a year now since you joined the Saxon Trust team as head of sales and marketing, how has your first year gone Brian?
It’s certainly gone very quickly… I came on board just as Covid was finally abating and quickly worked my way through three Prime Ministers and a major economic crisis!
Despite all this turmoil we achieved all our major objectives for 2022. We’ve certainly raised the profile of Saxon Trust which had previously flown somewhat under the radar. In addition, we’ve quadrupled the size of our book in the first nine months of last year, grown the team and most recently launched a brand-new website.
On a personal note, I’m delighted my eldest son Jacob has joined us and is already proving to be a great asset to the business. It’s also great to bring some young blood into the industry.
Andrew, as a founding director of Saxon Trust in early 2020, what do you see as the key points that differentiate you from other lenders in what is a very crowded market?
In fairness the market wasn’t quite so crowded when we started lending back in 2006 under our original trading style of Calmez. From the outset we focussed on a combination of development and, as the old trading name implies, mezzanine funding.
By 2020, with more diverse funding and the introduction of a broadening suite of products designed to support borrowers throughout their project lifecycle, we decided the time was right to rebrand the company. Consequently, Saxon Trust was born.
Of course, rebranding just before Covid struck wasn’t exactly ideal! As the first lockdown began, we immediately focussed our attention on looking after and assisting our existing borrowers. Our longstanding developer clients were facing unprecedented challenges, and by working even more closely with them through 2020 and 2021 we have gained unique insights into how we can best serve their needs, and the needs of new customers, going forwards.
As a business owned by seasoned property professionals, we already had decades of property development, investment, and lending experience. Added to this, the lessons of the last three years now help to inform our decisions, to drive our growth and to design our new products.
Creativity and entrepreneurialism are complimented by understanding and collaboration with all our borrowers and professional partners. These characteristics, combined with an eclectic and competitive mix of funding, are our key differentiators.
Brian, it’s clear that the first three quarters of last year went well at Saxon Trust despite steadily rising interest rates, but what about that tricky final quarter?
It was interesting that’s for sure! The good news is that the impact of Kwasi Kwarteng’s paradoxically named “Growth Budget” has now largely abated. For us, in the two weeks immediately after the budget, our enquiry levels nose dived but once we moved into October volumes picked up again very rapidly. Indeed, I would say in the final quarter of last year that we saw some of the best deal flow and quality of the year, which perhaps reflects an understandably more restrictive approach by other lenders.
What particularly pleased me about this surge in new business was that it proved our hard work to raise the profile of Saxon Trust was now paying dividends. It was no longer a case of “Saxon who?” but more a case of “right, let’s see if Saxon Trust can help.”
Andrew, you touched briefly in your previous answer about a broadening product range. It would be great to know in a little more detail what Saxon currently offers?
Transparent, innovative products have always been a Saxon Trust hallmark and the specialist development exit products we launched last year are a great example of this. Both our Finish & Sell and Market & Sell products have proved very popular.
Key to this popularity is the fact that borrowers can automatically transition from one of our ground-up loans to the Finish & Sell product once units become wind and watertight. This transition does not incur any additional fees but can see borrowers’ monthly rates dropping by up to 20 Bps. Thereafter, once units reach practical completion, borrowers can further reduce their rate by transitioning, fee free again, to a Market & Sell loan.
Our rationale here is very simple – as developments near completion and our risk reduces, we want our borrowers to see the results of their hard work reflected in pricing. In addition, by allowing them adequate time to market and maximise on their sales we can help them minimise their downside risk and place them in the strongest possible position as they move onto future projects.
Product initiatives such as this ensure that many of our borrowers are repeat customers, a trend we want to keep building on this year and in the years ahead.
It’s clear to see that your existing product range is working well but what do Saxon Trust have in the pipeline Brian?
Whilst we have seen some lenders exit the market there seems no end to the number of new entrants, many of whom seem to be making the same claims about speed, flexibility, the use of cutting-edge technology and access to decision makers. Some even promise contact from “real people” as opposed to what I’m not quite sure?! For me all the above should be a minimum requirement for any specialist lender. Whilst we embrace technology it’s never at the expense of regular contact from our experienced underwriters.
With enhanced funding capability kicking in before the end of the second quarter, we are already working on exciting new products and borrower initiatives for bridging, development exit, refurbishments, and conversions right through to ground up projects. Of course, we’ll be informing all our intermediary partners about these new initiatives at the earliest opportunity.
Finally, looking ahead where do you see Saxon Trust in 12 months, Andrew?
From where we stand sentiment remains very upbeat. Our existing investor and developer clients have strong pipelines, and we are seeing record volumes of new enquiries across bridging, development and development exit loans.
Whatever shocks it faces, the specialist finance market seems to bounce back stronger than ever. We are proud to be a small but growing part of this industry and determined to keep adding real value and new solutions for our clients. We’ll see where this takes us…