Recognise Bank – a closer look at the new buy-to-let lender

Fresh from its launch into professional buy-to-let in November 2021, Property Investor Post met with Recognise Bank’s managing director of commercial banking Ian Workman.

Relationship focus

It seems the bank is putting a lot of emphasis on its ability to build strong relationships with landlords, as it looks to secure business from those with at least four properties.

Workman was asked why professional landlords should use Recognise. After all, the lender is a new kid on the block, as its deposit restrictions were first removed in September 2021.

He said: “We believe there are very few buy-to-let lenders that pair dedicated relationship managers with landlords.

Ian Workman

“It’s about building a long-term relationship, and providing professional landlords with a bespoke service.”

Credit managers – i.e. underwriters – will also be put in front of landlords, with the idea that the pair can work together to make deals work and plan for the future.

In terms of examples of a ‘bespoke’ service, Workman said the lender can switch bridging products to buy-to-let, as well as leverage the existing portfolio to help landlords buy more homes.

Meanwhile transactions can be dealt with speedily if there’s a strong relationship with the landlord.

Lending criteria

Recognise offers headline mortgage rates of 3.59%, while it lends up to 75% loan-to-value on loans between £100,000 and £5 million.

As well as buy-to-let and bridging, the bank lends on commercial property.

The lender currently looks at EPC ratings as part of its lending criteria, while Workman said the bank is eying upcoming legislation when deciding on what products to launch.

The lender is interested in government changes to permitted development rights, which could potentially make it easier for developers to convert retail to residential units. Subject to government legislation, you wouldn’t rule out a product from the lender designed to assist these conversions.

As it stands however Workman cautioned that, while the lender is looking at development finance, it’s not ready to commit to the market.

In December Recognise partnered with tech firm Rent Chief, which helps investors identify areas where there are strong rental yields.

Workman explained: “It’s all part of a risk assessment.

“If a property we are lending on offers good rental yields it’s more attractive and can impact the price we can charge.”

Returning to cities

Workman said he’s witnessing more landlords investing in city properties, after the pandemic dampened down demand from 2020.

He said: “It’s more of a buyers’ market in the cities, and professionals are taking advantage of that.

“Some are seeing this as the bottom of the market.”

In the first six months Recognise Bank completed £100m of lending across its whole book, and the aim is to increase this amount in 2022 and beyond.

Recognise is headquartered in London, Birmingham, Manchester and Leeds, while with the help of its proximity the bulk of its deals have been done in these cities so far.

Workman added: “I am very bullish on the market. I think it will continue to grow – in the right areas.”

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