Kensington Mortgages has a long history of lending to people with poor credit histories. But one area that it now wants to be equally known for is complex lending.
According to Craig McKinlay, sales and marketing director of Kensington’s parent company Northview Group, complex lending stretches far beyond those with adverse credit.
Self-employed individuals are among the types of complex borrowers the mortgage lender wants to target. There are roughly 4.7m people in the UK who are registered as self-employed, and this number is rising.
Mr McKinlay said: “We are known for looking to say yes to customers. We have a real strength in working with customers who do not fit the credit criteria in the high street. What I would also like us to be known for is operating in other niches, which is more to do with complex incomes.”
This move by Kensington forms part of the company’s plans to broaden its proposition. One of the ways it will do this is by working with more networks and creating bespoke propositions.
“We will pay closer attention to the different types of mortgage networks and clubs, and how we can come up with more bespoke propositions for them,” Mr McKinlay said.
“There are other niches we can look at and we need to increase our distribution. We are only in England and Wales at the moment.”
Kensington has been in the specialist lending space for more than 20 years and it has survived two recessions, despite operating at the riskier end of the lending spectrum. This “resilience” is one of the things that attracted Mr McKinlay to the role, which he took up in October. Northview’s other subsidiary is intermediary-only, buy-to-let specialist New Street Mortgages. He was previously the commercial and channels director at Lloyds Banking Group, responsible for analytics, pricing, customer experience, business development and channel engagement across retail and commercial banking.
Mr McKinlay’s role at Northview is heavily geared towards speaking to brokers and getting real-time feedback on how the market is performing. “We have a multi-niche strategy and we try to play in the niches that do not fit the high street,” he said.
“That is where we look to pick up business by looking at complex underwriting and using human underwriters. A lot of the high street is a manufactured process now – if you kind of fit into the box, which a lot of people don’t. That’s where specialist lenders come in.”
Complex customers
Another group that fits into this pot of complex customers are contractors. Mr McKinlay said: “The specialist market has grown quite fast as high street lenders are getting more automated, which is great if you cover standard cases. But there are lots of people who fall outside of that process.”
This is one of the main reasons why Kensington will continue to distribute its products through brokers, the director stressed. Another reason is to balance the perceived risk attached to those who have complex credit histories with getting the right customer on Kensington’s portfolio.
Mr McKinlay said: “Every single case is manually underwritten by an underwriter. We can take the time to look at the customer’s circumstances rather than what comes through on the automated system. And if we have any problems we can talk to the broker who talks to the customer, so we take the time to really look at the customer to see where there are blips to work out if it is a pattern or a one-off.”
The technology that Kensington uses is more at the front end to help brokers input data. But the final decision on whether to approve the mortgage will always lie with the underwriter.
Mr McKinlay also has aspirations for Kensington to become a leader in specialist lending. The firm has made a number of moves in this direction, including increasing its back-office and underwriting capability. It has also expanded its telephone development teams and field officers, who meet with brokers face-to-face to talk about their businesses and market issues.
The director has found the biggest challenges facing mortgage intermediaries are the stricter rules in the buy-to-let sector and on the residential side – the difficulty that many face when trying to find a lender that will accept a customer who does not fit the criteria.
Another area are the challenges first-time buyers have experienced in recent years. In the 2017 Autumn Budget, the government revealed plans to help first-time buyers by abolishing stamp duty on the first £300,000.
But Mr McKinlay said the government needs to do more to get the market moving at the upper end of the housing ladder, for those looking to move home.
He added: “The market is really healthy, which means more competition for us. But we all need to raise our game and come up with really good customer propositions.”
Ima Jackson-Obot is a features writer at Financial Adviser
Craig McKinlay's career highlights:
October 2017 – Present: Sales and marketing director, Northview Group
2016 – 2017: Commercial and channels director, Lloyds Banking Group
2012 – 2016: New mortgage business director, Lloyds Banking Group
2010 – 2012: Director of marketing, Homeserve
2005 – 2010: Head of sales and marketing, RAC
