Despite the Stamp Duty changes in April, originations in the Bank's Property Finance division remained robust, increasing by 19% from £416 million in H1 2015 to £495 million in H1 2016 - including second charge mortgage originations of £103 million.
Despite disruption arising from the transition from the Consumer Credit Act to the Mortgage Credit Directive in the second charge mortgage market, the Bank's second charge mortgage perfomance has remained 'in line with management’s expectations'.
After the recent merger of Shawbrook’s Commercial and Secured businesses into the newly created Property Finance division, the Bank also confirmed the promotions of two senior Commercial team members today, with Emma Cox moving into a Sales Director Role for Commercial and Sarah Woolf taking over as Head of Sales.
The report continued: “The [Property Finance] division has a well-diversified product range serving property professionals in both residential and commercial investment markets, across short term and more traditional mortgage terms. Whilst the majority of the loans are to established landlords and property professionals, it also lends to well-established SME owner-occupiers. 86% of originations in H1 2016 were supported by residential property, 8% by mixed commercial and residential property and 6% by commercial property.
In H1 2016 the Property Finance division achieved strong growth in the loan book to £2.3 billion (H1 2015: £1.6 billion); continued its excellent loan performance with a H1 2016 gross asset yield(4) of 6.7% (H1 2015: 7.1%); the drop was primarily a result of higher yielding back book being replaced with lower yielding front book. We continued to retain strong credit discipline in terms of loan to value and income coverage ratios.”
