March 2018
By Gavin Morrison, origination – director at Zorin Finance
Competition in the short-term property lending market has never been so healthy - it seems as though not a week goes by without a new bridging lender entering the market. Over the past 12 months, we have seen lenders reducing headline rates, increasing product offering and increasing LTVs in an attempt to maintain or increase market share.
From the borrower’s perspective, competition should only have a positive effect although, as we all know, too much choice can be confusing. Just think of that intimidating restaurant menu with 25 starters to choose from. Too many choices exhaust us, make us unhappy and lead us to sometimes avoid making a decision altogether. Psychologist Barry Schwartz calls this ‘choice overload’.
At Zorin Finance, we fully appreciate that brokers and borrowers have genuine choice about where they place their business. We recognise that, in the current competitive landscape, it is important to listen to our clients, brokers and partners to ensure that our lending products (and pricing) remain fit for purpose. For example, we have listened to feedback from clients and brokers and extended our lending parameters to include all parts of England and Wales, having previously just focused on the South East. We are also now looking at other asset classes such as student accommodation and hotels.
Collaboration is the fuel of any business, whether it is between employees, partners or clients. It is a driving force for continued efficiency and a necessity for improving the outcomes of many business activities. Collaboration with our partners is key to ensuring that we remain relevant to our clients. As a founding lender committee member of FIBA, Zorin receives regular feedback from our broker network on the things we do well and the things we can do better. The FIBA lending panel is formed of ten leading UK property lenders who work together to give financial professionals within the property sector a stronger voice on issues such as policy, research and best practice.
More and more, what drives value is the ability to collaborate effectively with both people and technology. That is where advantage lies today and Zorin has invested heavily in this regard with a new, electronic lending platform due to come online within the next few months, which will enhance the overall borrower experience.
While the processes and procedures of large lenders can be clunky and cumbersome, smaller lenders that operate within a collaborative network can take decisions and adapt to new trends and opportunities with relative ease and at a faster pace. No longer can lenders rely on having the longest track record or biggest branch network to stay at the top of their game. Accumulating resources and expertise is no longer enough to guarantee success. To a large extent, it’s who - and not what - you know that matters.