Building a better business

Bob Young is chief executive officer of Fleet Mortgages


Establishing a new business is always challenging which is why it pays to get the foundations in place before you embark on the building process. This has certainly been our thinking as we work towards the launch of Fleet Mortgages next month, and for all our experience, particularly in the buy-to-let sector, we are not so naïve or arrogant to think that we know it all.

We are all acutely aware that the mortgage market has changed over the past few years which is why we have undertaken to speak to as many stakeholders as possible about what they want from a new lender and have married this up with what we believe the fundamentals of our offering should be.

In order to help us prepare the ground for our launch, I thought it would be useful to outline some of what brokers and intermediaries can expect from Fleet Mortgages when we do come to the marketplace. I appreciate expectations are high, and the huge array of support we’ve already achieved has been quite staggering, but there has to be an understanding of what we are willing to do and what we are not.

As a touchstone, I would refer you to the pre-Credit Crunch period and the subsequent recession, because it gives us a perfect example of where lenders got it wrong. As the sage of Omaha, Warren Buffett, so eloquently put it: “Only when the tide goes out do you discover who’s been swimming naked”. As time has shown us, far too many lenders in those pre-Crunch times were swimming without their costumes – effectively poor lending practices abounded, products were under-priced for the risk, and marketing/entertainment budgets were out of control. Some lenders were not in control and their losses show this all too well.

We know how we want Fleet Mortgages to be:

•        Lending to those who can afford it.

•        Being fair with brokers, valuers, lawyers and all third-party suppliers.

•        A business we can be proud to work for.

Now, I appreciate there’s nothing ground-breaking in the above but these are core fundamentals of what our business will be about. From that, the broker community might well understand how we are going to go about dealing with them and their clients. Here are a few further points, specifically regarding our thoughts on products, which should help you understand the offering we will be bringing to market:

•        From a product perspective we’re not going to pretend to be innovative. In my book ‘innovative’ generally means the price has been cut or criteria loosened. ‘Innovative’ products therefore tend to be cheaper, riskier and sometimes both.

•        We will lend at competitive rates to people who can afford to pay us back – no more, no less. This doesn’t mean we’ll be expensive but neither will it mean we are the cheapest. We’ll compete on service, accessibility, criteria and, to a lesser extent, price.

•        Our processes will lean heavily on our experience which means there’ll be a combination of automated credit tools (to speed up the process) and living, breathing human underwriters many of whom we’ve worked with for over a decade.

•        We are building a sustainable, successful business but we appreciate this doesn’t give us a ‘God given right’ to survive. We’ll therefore continually review products and process to be current, relevant and reflect market needs.

We know there is much more to be said about the relationships we will build with intermediaries and the infrastructure and support systems we have in place to make those work. However, this can be covered in my next blog.

For now, the work towards launch continues and we’ll continue to make sure we’re out in the marketplace listening to your views and integrating those into our proposition. It’s developing quickly but there is always time for feedback. At the end of the day, we are an intermediary-only lender and we’ll be delivering a lender that is new, hungry and wanting your business. Of that you can be completely sure.