Shawbrook Bank is set to launch into the specialist lending space during the first quarter next year.
The range will be aimed at borrowers with circumstances which exclude them from mainstream criteria, due to age, credit score or previous problems with late payment.
The bank already operates in the bridging, commercial and second charge mortgages, but is looking to branch out into first charge mortgages, led by recently-promoted managing director of residential mortgages Maeve Ward.
She moved from being sales and operations director for second charges in July and told FTAdviser that the new products are still at the testing stage, so may change in the next few months, but are currently being called the Complex Mortgage range.
“Post MCD [Mortgage Credit Directive] lenders on either side of the 1st and 2nd charge side have been looking to expand now both are aligned under the same regulations,” she stated.
“We’re very much an intermediary-led business, so we’ve spent lots of time consulting with advisers to find niches and underserved borrowers.”
Ahead of the specialist suite, Shawbrook is already developing a later life mortgage, aimed at borrowers aged 55 and over, with a cap at 80 years old at the end of the term, which should be ready before the end of this year.
Ms Ward said more details will be available in October, ahead of a launch in late November or early December.
“There are an awful lot of borrowers trapped on interest-only deals, who don’t want to sell up or downsize for a variety of reasons. We’re looking at offering terms between five and 15 years, based on our flexible, common sense approach to underwriting.”
The last 12 months has been busy with new entrants into the specialist end of the market, with Atom Bank setting out its stall in April, followed by the launch of ex-Mortgages PLC boss Trevor Pothecary’s The Mortgage Lender in May.
Bluestone Mortgages entered the UK market at the end of last year, with managing director Matt Andrews taking aim at rivals taking the “easy route to market” with buy-to-let, secured and bridging loans, instead of truly differentiated propositions serving borrowers with bad credit.
At the end of June, Shawbrook’s results revealed it booked a £9m additional impairment charge in the second quarter due to “irregularities” in its asset finance business.
“The irregularities, which have now been rectified, were the result of a number of loans being underwritten in our asset finance business that did not meet the business’s strict lending criteria,” the report stated.
“This control breach was identified by the group’s upgraded risk management systems and controls, which were implemented following significant investment through 2015 and H1 2016.”
Also at that stage, the bank’s chief financial officer Tom Wood announced his resignation, after having been with the firm since 2012. Director of strategy Dylan Minto replaced him on an interim basis.
