Why Mipim is all about relationship-building

Together has been going to Mipim for the past six years and finds it an invaluable opportunity to catch up with existing clients and forge relationships with new customers. Away from the pressure of the day job, everyone is there to engage and network and ultimately do business.

In a world where the number of lenders has mushroomed and where brokers are busy trying to find the best deals for their clients, you might think that relationship-building wouldn’t be as relevant as it once was. The reality, though, is actually quite different.

Of course, it is important to be price-competitive, but it is vital to be a trusted partner. To build trust, you must forge strong relationships with your customers. That is why we pride ourselves on having key relationship directors – people who have a deep understanding of their local marketplace – based around the country. Borrowers are also able to pick up the phone and talk directly to someone who already knows their business and can make an immediate decision or, even better, they can come in for a cup of coffee to talk through their upcoming deals and projects.

Events like Mipim are an ideal way to have these important conversations in a more relaxed setting. We also host a number of events around the UK for our corporate and smaller clients. At our latest event, we had around 160 guests in Manchester for an event designed to bring people together. It’s important that we recognise our great customers and we held an intimate dinner hosted by Homes Under the Hammer presenter Martin Roberts. He talked about the state of the prime London housing market and the opportunities that exist post-election. As well as providing a chance to catch up and talk about upcoming requirements, events like these are a way for us to show our appreciation to customers.

But ultimately, the most important key to relationship-building is reputation and the service you provide as a business. Clients need to know they are being given supportive but also honest advice. Sometimes, that means turning away business or having hard conversations, but in the long run it pays dividends for the client-lender relationship. I had one particular client who we unfortunately couldn’t support when he first approached us, but because he had had an honest experience with us, he came back to us as his first port of call for his next project resulting in multiple deals.

Equally important as giving honest advice is being able to deliver. Often our borrowers are looking to transact quickly or have complicated deals that require complex solutions. In the short-term lending market, borrowers are typically under pressure to move quickly. They need to be confident that their finance partner has the experience and expertise to put together the right finance and then support them through the life of the loan.

Flexibility is key

Not all deals or development projects go entirely to plan and we can be flexible to help borrowers navigate the ups and downs. If there is a change of circumstances, we will be happy to assess the situation and take a view. It matters far more to our borrowers that we can get the job done and provide a high level of service than getting a few basis points shaved off the price. A lender’s ability to get the right finance in place can be the difference between success and failure.

At Together, we’ve put a lot of effort into building a relationship-based model. The results of that are now clear to see. Ten years ago in our commercial arm of the group, 35% of our customers would come to us directly. That percentage increased to 40% five years ago and is now over 50%. The increasing number of borrowers coming to us as their first port of call is a direct result of how we have changed as a business. At the same time, we work closely with our key broker partners, which allows us to deliver a complete package to our customers.

We’ve been particularly successful at attracting corporate clients and high-net-worth individuals over the last five years. They turn to us, not because they have struggled to secure finance elsewhere but because they value the speed and quality of service we can offer. Many such borrowers have come back to us again and again. They also tend not to be seeking particularly high levels of leverage, which has helped us keep the gearing level across our £4bn loan book at a conservative level of about 58%. This helps give us confidence as a business that we can weather any potential market turbulence that may lie ahead.

Clients need to know they are being given honest advice. Sometimes, that means turning away business or having hard conversations, but in the long run it pays dividends for the client-lender relationship

That said, we are cautiously optimistic about the future. The general election result has helped restore a degree of political certainty and has already helped boost market activity in the past month or so. We certainly expect 2020 to be a busier year for dealmaking than last year, with a degree of pent-up demand expected to drive the market as business uncertainty subsides.

Brexit remains a challenge and is something we always get asked about as a lender. My view, though, is that irrespective of what eventually happens in the post-Brexit world, there is still a massive housing shortage. So whatever the outcome of trade negotiations, a three-bed semi in Doncaster will still be a three-bed semi in Doncaster. In other words, there will still be properties people want to buy and live in.

Ultimately, whatever happens over the next few years, we will be there to support our borrowers. Once again, relationships are crucial. If we know our borrowers well and have an intimate knowledge of their businesses, then we will be in a strong position to support them through market cycles. Beyond the glamour of Cannes, that is the serious business of Mipim: relationship-building.