The Intermediary – March 2025 - Flipbook - Page 39
I N T E RV I E W
you still need a mortgage. So, we had a rate
out there that worked in terms of what we
could offer, and left it up to the landlord as to
whether they took it.”
Neale takes pride in the fact that Quantum
“met all [its] business plans in terms of
profitability and exceeding lending targets –
reaching break even in the first year, which is
unheard of for a non-bank lender.”
Choppy waters
The market picture now, of course, has changed
massively once again, but the lessons learned
during this period still have weight as a core
part of Quantum’s approach.
Not only did this mean continuing to
provide fixed rates at a time when others were
withdrawing, but for Quantum, it also meant
honouring its pipeline applications even during
difficult times, and providing 48-hour notice of
product changes and withdrawals.
Neale says: “While it was a difficult time for
us as a lender, it was far more difficult for our
intermediary partners, so we stuck by them
and supported them as much as we could, and
they’ve continued to support us.”
While there may be a misconception among
some consumers that it is safer to deal with
a bank, the difficult years of Quantum’s initial
launch showed the value of the non-bank
model, particularly in the specialist market.
Neale explains: “Having worked for non-bank
lenders for many years, I thought I’d work for a
bank at one point – a nice secure role – and it’s
not necessarily any safer! In fact, much bank
behaviour is far worse because of their need to
create shareholder value and manage risk.
“The key benefit for us is first that, yes we
have funders, but we decide our own destiny.
We’re also a much more nimble business – we
don’t have large committees. We can make the
decision one afternoon and start working on it
the same day. We can act very quickly.”
Fast decision-making was, as everyone will
remember, key to surviving the days of rapid
market changes, rising interest and base rates,
and unpredictable global events that could
strike with fresh complications at any moment.
“From a credit risk perspective, one of the
key things for us was to apply more common
sense,” Neale continues. “One of the key
objectives was to bring that, and transparency,
back to specialist lending.
“It’s difficult to do that if you’re a bank,
because you have credit and risk teams that
may not always align with what’s happening
in the market. But as a non-bank lender, we’ve
got more control.”
Even as the waters seemingly settle, this
approach is no less fitting, and Neale highlights
the importance of Quantum having control
over its own risk appetites as it navigates
around whatever developments – positive or
negative – might come across the horizon next.
In specialist BTL, as the landscape continues
to shift, that nimble approach will be key.
Expanding the proposition
It its core, Quantum Mortgages provides
solutions predominantly for professional
landlords. At the moment, only 4% of the
firm’s book is made up of landlords with one
property, even though they make up around
55% of landlords in the UK.
Professional landlords fit the Quantum
proposition, Neale says, because they have
more complex circumstances – necessitating
specialist intervention – but are likely to boast
a better track record. This means the lender
can take a more nuanced approach, founded on
“faith in the landlord’s experiences,” as well as
its own expertise and credit and risk profile.
For example, Quantum Mortgages can
lend on more complex properties when
considering a borrower’s broader portfolio and
existing experience.
Neale says: “These are landlords that are
running their portfolio as a business. Their
circumstances are more complex, but they
have a track record of running a portfolio.
“If you’re a large portfolio landlord with a
good track record and solid rental yield, there’s
a reason you want to buy, say, a city centre flat
above a fast-food outlet. Virtually every BTL
lender out there wouldn’t lend on that, but we
could be comfortable with that, because we’re
putting faith into the landlord’s understanding
– perhaps that the property is highly lettable,
in the city centre, with good rental yield – and
the fact that they have a large portfolio with
surplus income.”
In early 2025, Quantum has introduced a
wider range of products and expanded its core
client base. This includes branching out into
catering for first-time landlords, as well as – at
the time of writing – an imminent launch into
the short-term lending market.
Over the years, Quantum has tweaked
criteria to keep its products current, but Neale
sees 2025 as the year of adding new offerings.
The short-term finance proposition is
currently in its pilot phase, working with
specially selected intermediaries. Meanwhile,
on the BTL side, two new products include its
large loan proposition, which offers individual
loans up to £5m, and which Neale sees as →
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