A new decade
Steve Brilus is chief executive of second-charge lender at Evolution Money
A new decade, the radio plays the sounds we made, and everything seems to feel just right…
For those of you who are not aficionados of North-West-based rock’n’roll bands, these are the lyrics of one Richard Ashcroft from The Verve – a band formed not a million miles away from where we are based, in Wigan.
It’s not perhaps their most famous song – being on the album before Urban Hymns – but it’s a goodie and talks about a new decade so gives me a jumping-off point.
Now, I’m aware I’m using some artistic license here because we’re nearly 18 months into a new decade but, given how 2020/2021 has worked out, I suspect there are many of us who would like to start afresh.
However, in a purely ‘personal’ corporate sense it is ‘a new decade’ for Evolution because we’ve literally just passed our 10th anniversary and, were it not for lockdown/social distancing, etcetera, I suspect we would be having a very big party and listening to some sounds to celebrate.
As mentioned, a lot has happened in the last year and a half, let alone the last decade but it was back in May 2011 when Evolution – being run out of a tiny office in city centre Manchester – funded its first loan of £750.
That was the work of our managing director, Mat Montgomery, and one underwriter but as the saying goes ‘from small acorns do big oak trees grow’ and since then we’ve grown into a 100-plus employee business, have been through two further office changes and are rapidly outgrowing our current offices, and have lent well over £260m to over 26,500 customers.
Other financial services businesses who started in the aftermath of the Credit Crunch and the subsequent recession will know only too well, the challenges that were present at the time, particularly in an environment where finding funding was no easy task.
Take out the lack of funding, which thank goodness is not an issue at present, and it’s possible to see a number of comparisons between now and then.
Indeed, Evolution was established to help those customers who might come with a financial history that was less than perfect – perhaps due to the impact of the Crunch/recession – but were looking for second-charge finance, perhaps to consolidate that debt or to fund other necessities.
Over the past year or so, while we’ve seen a significant increase in the number of prime borrowers who are suitable for a second-charge mortgage.
We’re also acutely aware that we may well see a growing number of potential customers who, for example, needed to take mortgage or credit card payment holidays last year, or may have varying degrees of adverse credit in their financial history.
The beauty of the second-charge mortgage is that we are able to accommodate those types of customers very easily, and turn a financial need into a solution, utilising the equity in the home and ensuring the client doesn’t need to remortgage – potentially having to pay an ERC – and that they get the money they need.
It seems a very obvious point to make but it’s certainly one worth making, that while there is a lot of media noise around a ‘booming’ housing market, the economy is still (to a very large extent) on a form of government life support.
The furlough scheme has been extended to the end of September this year, and it may well be that we don’t know the true impact of the pandemic until it comes to an end.
Certainly, while the latest data appears to show that the level of unemployment will be below the worst-case scenarios, there is still much economic water to flow under the bridge, and I suspect that large numbers of homeowners are going to come out of this period with more debt than they went into it with.
However, where we currently differ greatly with a decade ago, is the provision of credit and the availability of funding and lending.
This has not been a ‘Credit Crunch’ but more of an operational crunch, in terms of lenders like ourselves ensuring our employees were safe, could work from home/remotely, and that we could keep continue to provide our services and products.
In a way, that has to be one of our biggest achievements of the last 10 years – I suspect there are many firms who will feel the same.
Moving through 2020 and 2021 has shown the incredible resilience and quality of our staff; it was an amazing effort from ‘Team Evo’ and another reason why we hope to be able to celebrate this 10-year anniversary together soon.
Overall, the last ten years has seen its fair share of ups and downs, but from a second-charge mortgage perspective, I’m struggling to think of a time when the sector was in ruder health, when it had a greater verve.
A growing customer demand can be serviced by lenders like ourselves and advisers and introducers have a healthy and competitive market to choose from. Should be music to all our ears.