First Published 10/12/21
Mortgage Introducer talks to Andrew Gardiner and Brian West at Saxon Trust to find out what differentiates them from other lenders and to learn more about their plans for 2022 and beyond.
It may surprise some to learn that the team at Saxon Trust have been lending very successfully without fanfare since 2006, albeit for much of this time under their original trading style of Calmez.
With a broadening suite of loan products designed to help and support borrowers throughout their project lifecycle, the team decided, in 2020, that the time was right for a rebrand. Consequently, Saxon Trust was born.
Andrew Gardiner, director and co-founder of Saxon Trust explains: “The business is privately owned and has been built by property professionals who originally focused on a combination of development and mezzanine lending. It’s this hands-on development experience that now allows us to fully support our borrowers across their range of needs and make assessments specific to each individual deal.”
With newly expanded institutional funding lines now secured and several senior hires in recent months, this flexibility has been further enhanced.
A combination of strategic owner backing, and institutional capital has enabled the growing Saxon Trust team to considerably accelerate product development so that they now offer a diverse range of product solutions designed to fit a project life cycle.
Brian West, head of sales & marketing adds: “It’s rare to find genuine USP’s in a market that’s awash with liquidity and lenders. Many claim them but few can actually deliver. Our background, structure and experience has always seen us creating products to fill gaps in the market, a process that we are now accelerating with genuinely unique stretch development, stepped bridging, development exit and other new products. We are excited by these products so now is an obvious time to gear up and grow the business.”
EMERGING TRENDS
Having rebranded early in 2020, Saxon Trust are delighted to see light finally emerging at the end of a very long pandemic tunnel.
The team have always been proud of the long-term relationships they have built with intermediaries, borrowers and professional partners and believe that the challenges of the last two years now put them in a great position to drive growth through the transparent, innovative products that have always been their hallmark.
Gardiner says: “When the COVID storm first broke we focused our attention primarily on looking after and assisting our existing borrowers. We have all faced unprecedented challenges in the last two years, not least of all some of our longstanding developer clients who have endured material and labour shortages, rapidly rising costs, lockdowns and much more besides.
“By working more closely than ever with these borrowers we have gained unique insights into how we can best serve their needs going forwards. It’s this understanding that has informed and driven our new products.”
Amongst a suite of new products their newly launched finish & sell and market & sell products are proving particularly popular alongside core products such as ground-up development. Key to this popularity is the fact that borrowers can transition from ground-up to the finish & sell product once units become wind and watertight. This transition does not incur any additional fees on the transfer but can see borrower’s rates dropping by over 0.20%.
As West says: “The rationale behind fee free product transfers is very clear. We want to ensure that as developments near completion and our risk reduces our developers start to see the fruits of their labour reflected in pricing. In addition, by allowing them adequate time to market and maximise on their sales we can minimise their downside risk whilst placing them in the strongest possible position moving onto future developments. Most of our developers are already repeat borrowers and with these new products we expect this longstanding trend to become even more pronounced.”
Added to this, Saxon Trust can to offer very competitive bridging rates starting from just 0.55% PM on their new stepped rate product and stretch funding to a maximum 75% LTGDV and 90% LTC and even more with additional security.
Specifically, regarding the stretch product, Gardiner states: “Our hands on experience of development funding allows us to look further up the risk curve than most lenders and, although we now do less mezzanine funding, our stretch loans can present a very viable alternative and indeed a better overall proposition. Two lenders, senior and mezzanine, on a single deal can lead to issues including legal complexity, a duplication of costs and more complicated day to day management all of which can be negated by a single stretch loan.”
EXPERIENCE IS KEY
It quickly becomes very clear when talking to Gardiner and West that they share a great enthusiasm for the specialist lending market and it’s this passion that drives their desire to deliver genuinely innovative products and solutions. Both believe that whilst greater choice is good for the market a seemingly endless influx of new lenders is not necessarily providing this.
“There seems no end to the number of new entrants, many of whom seem to be making the same claims about speed, flexibility and access to decision makers allied with the use of cutting-edge technology. For me the first three should be a minimum requirement for any short-term lender and whilst embracing technology is a must it should never be done at the expense of regular contact from experienced underwriters,” West says.
Gardiner is quick to agree, pointing out: “Whilst we use third-party software and have built our own internal tools you are unlikely to see us using chatbots and bespoke mobile apps anytime soon. Since November we have recruited four senior department heads; hugely experienced individuals who will drive our use of new cutting-edge property technology but who crucially possess the experience to interpret and understand the insights provided.”
He adds that: “They will also ensure that from project start to finish borrowers will, if they so desire, have a single point of contact even if they transition to another type of loan.”
THE FUTURE
It’s clear from Gardiner and West that they are extremely confident about Saxon Trust’s prospects for the coming year despite a somewhat uncertain economic backdrop. Bank rates would appear to be heading in one direction only and as the impact of recent super low mortgage rates and the prolonged stamp duty moratorium begin to fade there are still some headwinds, including of course rapidly rising tax and energy prices. Tailwinds remain however, not least of all due to the chronic imbalance that remains between the supply and demand for housing.
West believes that in times of uncertainty such as the past two years: “Investors will always look to real estate as a reliable asset class for both long term capital growth and regular rental returns. Consequently, bridging loans have become a vital component part of the wider UK property market. They have helped to fuel a boom in investors buying at auction, in DIY refurbishments and in the acquisition, conversion and refurbishment of properties that are often considered unmortgageable by more traditional lenders.
“Furthermore, by offering cost-effective funding for a wide variety of purposes including business loans to consolidate debts and reduce costings or conversely cash injections to drive growth, bridging loans are a key driver of the economy.”
With their new funding enabling the provision of tailored, highly competitive bridging products the Saxon Trust team are keen to build their bridging portfolio. Equally they are optimistic for the prospects of strong continued growth in the development market with Gardiner stating:
“From where we stand sentiment remains upbeat. Our developer clients generally have strong pipelines and government initiatives such as build to rent and the affordable homes program will be complimented by relaxed Permitted Development Rights for commercial to residential conversions, a greater focus on sustainability and increased use of airspace development.”
He adds: “Hopefully the pace of material cost rises and labour shortages, which were so significant last year, will continue to ease as the pandemic outlook improves.”
With a range of innovative new products, a strong and approachable team and a unique mix of funding Gardiner concludes: “It’s testament to the inherent strength of the specialist finance market that whatever shocks it faces it bounces back stronger than ever. At Saxon Trust we are extremely proud to be a part of the industry and determined to add real value with solutions that maximise opportunity for our borrowers.”
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