Financial Reporter: In the Spotlight with Stephen Hogg, West One Loans

     Stephen Hogg - Chief Operating Officer

Interview with Financial Reporter - October 2023

We spoke to Stephen Hogg, chief operating officer at West One Loans, about how the firm has adapted to recent market volatility, the biggest issues currently facing the specialist finance market, and West One’s ambitions for the future.

Q: Start by telling us a bit about West One Loans and your role in the business?

A: West One was founded in 2007 as a bridging lender operating across London and the south-east. It has grown into one of the UK’s leading non-bank lenders and our goal now is to support real people in the real economy through our lending activity.

We offer a range of different products and services including development finance, bridging finance, buy-to-let mortgages, first and second charge homeowner mortgages, as well as mortgage broking and debt advisory services. The business has come a long way in a relatively short space of time, and we believe the key to further success is continuing to support our brokers and their clients.

To give you an idea of the scale of growth, we have loaned more than £6bn to date and have assets under management of over £2bn, which makes us the second largest non-bank lender in the UK.

As chief operating officer, it’s my job to keep the business functioning smoothly even as we continue to grow rapidly. I manage our people, processes, operating systems, and facilities to ensure that West One is a great place to work for our colleagues, and is able to provide fantastic service to our brokers and their clients. No two days are alike and I relish the challenge.

Q: How has West One established itself as one of the largest non-bank lenders in the UK?

A: First and foremost, it comes down to putting the customer first. For us, finding the right solution means treating every case individually and tailoring our lending to fit customer needs.

Customers also benefit from our the fact that we can offer brokers and their clients access to an array of integrated products. We have seen real benefit in being able to support clients through a borrowing lifecycle across several products – for example we have had customer take a bridging loan, then go on to development finance, then back to bridging, and finally into BTL.

Our range is one of the most comprehensive and competitive in the market and, to my mind, comes with a service proposition that beats any of our competitors. Certainty of finance has also helped us to grow quickly over the years. We are extremely well-capitalised and well-funded and can say confidently that even when faced with challenging economic and market conditions, our doors are always open.

Our customers can therefore rely on us to supply intelligent, tailored funding solutions, and to deliver on what we say will, without any delay or back-tracking.

Q: What impact has the recent market volatility had on the business and what changes have you made, if any?

A: Market volatility obviously affects everyone, but the way we run our business means we have remained in very good shape. Fluctuations in swap rates have led us to adjust pricing and make changes to some of our product offering over the past few months.

However, we have an intelligent hedging strategy, and plenty of capital and liquidity, so whilst our product pricing may change we will always remain in the market to supply funding at a prudent price, and minimise the impact of market volatility as much as we possibly can for our brokers and their clients.

As a result, we’ve had a strong first nine months of the year and were delighted to deliver record originations of £190m in July. We remain on track to deliver our budget for 2023 and our recent performance demonstrates just how robust, ambitious, and adaptable we are in all market conditions.

Q: What are the big issues facing the specialist finance market and how do you think it will evolve over the next 12 -24 months?

A: Honestly, we see the opportunity for West One over the next 12-24 months. Market conditions are tough, but our business is extremely resilient and can ride out short-term turbulence. We have trimmed our credit appetite as affordability pressures build in the wider economy, and we have had to shift pricing several times in response to rising rates. However, we retain plenty of liquidity, we are very well capitalised, and our loan book performance remains extremely strong.

Lending volumes are likely to be a bit lower than usual as a result of both lower borrowing demand – as customers can afford to borrow less at higher rates – and due to our own credit appetite. But this is just the ordinary ebb and flow of prudent lending. We are in this business for the very long term and we are focused on continuing to supply funding to brokers and customers whatever the market conditions.

If anything, the specialist market may end up growing slightly as a result of the financial pressures on households. There are already signs that traditional, high-street lenders are less willing to lend, and this is where non-bank and specialist lenders, like West One, can step in to fill the void.

What we are likely to see is more ingenuity and innovation from those specialist lenders which have managed to maintain a strong capital base and funding capacity as they endeavour to support as many borrowers as possible who are underserved by the mainstream market or who present complex cases.

Q: What are West One’s ambitions for the future?

A: Our ambition is to become the UK’s largest non-bank specialist property lender. Ultimately, to do that, we want to continue to grow West One so that we can reach more brokers, homeowners, landlords and property investors.

How we go about doing that is also very important to us. Our entire culture and value system at West One is built around the mnemonic CREDIT. These six key pillars; customers, results, energy, development, invention, and teamwork guide everything that we do.

So, for example, while we want the “results” to be increasing market share and growing profits, we are determined to do that by putting our customers first – always – and by creating a high-energy working environment that develops and nurtures talent to deliver inventive credit solutions.

Ultimately, we want to be known as the premier specialist lending brand in the market, as a lender that attracts brokers and their clients, as well as nurturing and developing the very best new talent in our industry.