TAB has launched a monthly market intelligence briefing for its sales and underwriting teams.
Jack Bonner, the chief risk officer at the commercial mortgage lender and bridging specialist, found mainstream lenders are cutting credit just as higher mortgage rates start to slow property sales.
The TAB Market Intelligence Briefing tracks official data and market surveys, including the Bank of England’s Credit Conditions Survey, RICS, Lloyds and the construction PMI - as well as TAB's own Mixed-Use Mortgage Monitor. The briefing is designed to show sales staff where demand is growing and to alert underwriters to emerging risks before they reach the pipeline.
The first edition, written by CRO Jack Bonner and circulated across the commercial mortgage lender, says the credit squeeze should drive demand for delayed refinances, discounted acquisitions and property-backed business funding.
Jack Bonner, chief risk officer at TAB, said: “The best lenders don't react to the market, they read it early. Major banks rely on dedicated research functions to turn a constant stream of economic data, market commentary and transaction evidence into a clear view of where opportunity lies and where risk is building. This TAB Market Intelligence Briefing is our version, built specifically around commercial mortgages, mixed-use property and bridging finance.”
The Bank of England’s Credit Conditions Survey for Q3, published in October, showed secured mortgage availability fell in the third quarter. Credit for small and medium-sized businesses also tightened - although overall commercial real estate credit improved. Lenders expect small-business availability to stay under pressure this quarter.
Bonner said: “Mainstream lenders are becoming more selective just as higher mortgage rates are constraining property sales. Banks are offering less, moving more slowly and asking for more. That is leaving fundamentally viable borrowers high and dry and generating opportunities for TAB in delayed refinances, discounted acquisitions and property-backed business funding.
“Our goal is always to deliver commercial mortgages at bridging speed, so we can potentially step in if the sales team knows where demand is growing, where competitors are pulling back and which sectors offer the best risk-adjusted opportunities for new business.
“Equally, the underwriting team needs the most up to date information if we're to stop emerging risks working their way into our pipeline. They need to know about softening values, lengthening exit timelines or shifts in refinance appetite.”
The briefing also highlights the weaker housing market is increasing buyers’ negotiating power.
Bonner said: “Out first briefing highlights what a good market this is for experienced, equity-backed purchasers seeking discounts on properties that have remained unsold and chain-break funding where there is an evidenced onward sale. A fast completion can often secure a decent discount for the right buyer.”
But the briefing also warns TAB's underwriters that a weaker housing market is leaving little room for poor exits.
Bonner said: “This highlights that underwriters need to deduct finance, selling and remedial costs when assessing the borrower’s real equity. And we need to give some additional attention to flats, service charges, short leases and high-value southern property.”
Sophie Meller, TAB's senior BDM for London, said: "Banks are becoming more restrictive. I met with a new brokerage in mid-October and they mentioned being messed around by a couple of the larger lenders, particularly around terms changing later down the line. Circumstances like these represent a golden opportunity for a lender like TAB.”
TAB plans to publish the briefing every month and will invite its sales and underwriting teams to feed in what they see from brokers and on live deals.
Bonner concluded: “Our new £200m facility gives us capacity to bring momentum to lending at a time when brokers need lenders who say yes quickly and mean it. If your client needs a commercial mortgage at bridging speed and can’t wait for the bank, think speed – think TAB.”
