The Intermediary – April 2025 - Flipbook - Page 43
T H E I N T E RV I E W
Shawbrook
private, thus ensuring its policies remain
relevant and supportive.
Cox says: “It’s about reading the markets,
investors, their needs and adapting to their
strategies as they evolve and trying to keep up.”
Supporting diversification
As the landlord landscape becomes
increasingly diverse, Shawbrook evolved
its proposition to support investors moving
beyond traditional residential buy-to-let (BTL)
models. It has seen a number of its investor
clients move into more complex asset classes
of late, particularly that of semi-commercial
and pure commercial investments.
“For a landlord to shift away from the
standard sort of residential buy-to-let and
move into the semi-commercial space, they
would have had to have really given that some
thought,” Cox explains.
“It comes back to trying to support those
investors as they transition and diversify those
portfolios into different asset classes.”
This shift introduces new challenges,
from navigating different tenant profiles to
managing commercial leases, which differ
significantly from standard Assured Shorthold
Tenancies (ASTs).
Shawbrook recognises that this transition
requires more than just financing; it requires
insight and infrastructure.
Cox says: “It’s about making sure that the
landlords are set up to manage that differently
to how they may manage a buy-to-let. Have
they got the right team around them? Have
they got the right infrastructure in terms of
managing this change? Have they got the legal
teams and the right accountants?”
For example, commercial income profiles
differ from those of residential tenants,
and landlords must manage scenarios like
quarterly rent payments against monthly
mortgage obligations.
The bank’s proposition goes deeper than
surface-level lending criteria. Shawbrook
invests in understanding the investor’s longterm strategy, Cox explains: “You can find
that they are diversifying because they want
better yields, and they’re looking at assets that
require a more careful handling in terms of
valuations. We need to make sure we’re guiding
them to make sure they are making the right
choice when choosing the right asset type.”
In these cases, Shawbrook ensures landlords
are not only financially equipped but also
operationally prepared to succeed.
Having initially started out in the commercial
investment space, this area remains at the core
of the bank’s identity, making it Shawbrook’s
“bread and butter.”
Cox says: “The very first mortgage that we
lent at Shawbrook was onto a commercial
investment, so we’ve stuck really close to it. It’s
in our DNA.”
This foundational expertise allows
Shawbrook to help landlords “navigate
some of those complexities in a very clear
way,” offering not just funding but a reliable,
ongoing partnership.
Cox says: “We don’t just give you some
money and it’s out the door and off you go.
It’s a continual partnership, and we’re a good
partner to have as part of your borrowing
strategy. We’re a safe bet.”
Incentivising energy efficiency
In light of the ongoing regulatory changes
around energy efficiency, particularly the
increasing pressure for landlords to achieve a
minimum Energy Performance Certificate (EPC)
rating of C or above, Shawbrook has placed
this issue “front of mind,” shaping the way it
designs and evolves its product offering.
One of the ways Shawbrook does this
is through its tailored short-term lending
products, specifically aimed at investors
looking to upgrade their buy-to-let properties.
Cox says: “We do short-term lending, but
with a product that’s designed specifically for
those investors looking to make improvements
to their buy-to-let assets.
“We will do that on a light refurb or a heavy
refurb basis. One of the requirements at the
end of that loan is that we would expect that
property to be a minimum Band C or above.”
Once the refurbishment is complete and
the property achieves the required EPC rating,
Shawbrook offers an incentive in the form of
discounted arrangement fees on a follow-on
term loan. This creates a “full lifecycle” product
experience for landlords – from acquisition and
improvement to long-term financing – with
energy efficiency embedded throughout.
Cox acknowledges that this area is still
evolving, and with regulations continually in
flux, Shawbrook is treading carefully. She says:
“It’s still a bit of a work in progress […] it’s
quite easy to fall foul of thinking, ‘right, we’ve
got the solution’ and then realise there’s a bit
more to it.”
Nevertheless, the lender’s commitment
remains clear.
Cox says: “The one thing we are committed
to is supporting landlords that are investing in
improving properties up to C and above, and
we’ve got those lending solutions.” →
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