Within the financial sector it’s vital that lenders have a clear mission statement. Without a sense of direction and an overarching strategy, it’s easy for banks to fall prey to “feature creep”, trying to do everything, and pleasing nobody. In the financial services more than any other industry it’s quality of service which speaks volumes, and OneSavings Bank is an excellent example of a lender with a clarity of purpose and identity. As a modern bespoke lender with a network of contacts across the industry, OneSavings Bank is a specialist provider of residential, buy to let and commercial mortgages for a variety of customers, and operates a range of subsidiary lenders to facilitate effective segregation of services.
OneSavings Bank operates under the central concept that it’s vital to provide top-shelf quality in everything you do. Without a firm commitment to offering the best in class to every customer it’s easy for a lender to sink into the background - it’s crucial to stand out from the competition by providing the best service available. All very well, but much easier said than done; it takes real expertise and substantial experience to become a market-leading lender, but OneSavings Bank has achieved this through their ongoing commitment to continual improvement, and by diversifying their product range through a network of subsidiary lenders.
We’ll take a look at where OneSavings Bank has come from, what it’s goals are and how it will achieve them, taking note of the various different products on offer from this lender. This article will discover what makes OneSavings Bank tick, and how it manages to differentiate its products from the rest of the market.
OneSavings Bank is a cutting-edge lender with an emphasis on digital engagement, but it has roots in a surprising place; the lender that would become OneSavings Bank was actually founded 170 years ago as Kent Reliance. In 1847, Kent Reliance was established as a building society, part of the huge number of similar organisations being created across the UK at that time. Building societies were enormously popular throughout the 18th and 19th centuries as a means for local investors to construct homes, and by the time Kent Reliance was founded there was a building society in almost every village in Britain. Kent Reliance was highly successful and founded several branches across the South-East of England, including Dover, Herne Bay and Chatham. In the late 20th century these branches all formed together under the umbrella of KRBS, the Kent Reliance Building Society.
In 2010 the members of the KRBS voted to incorporate as a trading bank, which was accomplished the following year. In 2011, the Kent Reliance Building Society became a part of OneSavings Bank, but it still retains its local identity and emphasis on providing a personal touch. As an important touchstone of the OneSavings Bank brand, KRBS provides a major element of the lender’s overall financial strategy, and helps it to maintain an overall lending identity.
There are thousands of lenders in the UK property market, and it’s harder than ever for a lender to stand out against the competition. When every lender seems to offer the same products and is continually clamouring for attention the only way to be noticed is through the quality of your products, a strategy which OneSavings Bank pursues with great vigour. OneSavings Bank isn’t a mainstream lender and as such doesn’t simply blanket the market with “one size fits all” financial products. Instead, OneSavings Bank focuses on providing financial solutions to actual problems faced by its customers - this enables it to generate powerful bespoke lending packages that meet the needs of borrowers and investors across the industry.
OneSavings Bank is one of many hundreds of banks that offers regulated residential, buy to let and commercial mortgages. So why do borrowers turn to OneSavings Bank instead of mainstream lenders? The answer is that there are some things that a small, agile lender can provide which a larger bank simply can’t.
A lender like OneSavings Bank, which consists of several highly specialised divisions, can precisely target a select group of customers. It fills a niche in the market, and focuses on providing specialised services to a limited customer base - this means that it doesn’t rely on mass appeal, and must instead identify the precise needs of its core clientele. By diversifying its reach into the market, OneSavings Bank is able to generate tailored lending solutions for any situation.
This is much more work than a mainstream lender can commit to; given their vast infrastructure, these banks have to appeal to the lowest common denominator. The majority of mortgages are completely straightforward and don’t require any specialist attention, so these banks simply don’t offer a solution; if you don’t fit their criteria, you can’t have a mortgage. OneSavings Bank, on the other hand, is willing and able to take on the challenges faced by these borrowers, and this lender isn’t afraid to work out loan solutions when the answer isn’t obvious.
OneSavings Bank offers a range of products to the market, all of which fall within the spectrum of secured lending. However, the loans on offer from OneSavings Bank cover various different areas of this market, and must accommodate a wide range of needs; a commercial mortgage is very different from a residential one, so it’s important that OneSavings Bank has a great deal of experience in many different areas. OneSavings Bank specialises in providing financial solutions for many different applications, and we’ve explored a few of their core offerings below.
A residential mortgage is what most people think of when they hear “mortgage”; it’s the secured home loan that’s most familiar to the public, especially those who are homeowners themselves. However, residential mortgages are actually fairly uncommon within the private lending market, because there are strict requirements placed on lenders who provide home loans for owner-occupied properties.
The Financial Conduct Authority, responsible for overseeing consumer rights within the financial industry, requires any lender offering mortgages for the purchase of an owner-occupied property to submit to FCA regulation. Regulation, in this case, is fairly tricky to achieve; the FCA’s criteria are strict, and govern precisely what terms are acceptable when offering a loan for the purchase of someone’s own home. This is because the purchase of a home is seen as something that the average citizen will do during their lifetime without having much experience of the market, and taking on something as serious as a mortgage without a strong understanding of property lending can be extremely detrimental. Therefore, it’s important to make sure that home loans for owner-occupied properties are regulated, guarding the interests of UK consumers. OneSavings Bank is one of the few regulated UK lenders that remains independent and able to offer loans for owner-occupied properties, placing it in an excellent position to provide financial resolutions for customers with unique situations.
OneSavings Bank provides excellent options for homeowners when it comes to securing a market-leading mortgage, even enabling customers with a small deposit to take on a high-value mortgage with a strong, competitive interest rate. In addition to this, OneSavings Bank provides in-depth mortgage advice and financial services to clients, including a remortgage service that helps to ensure their customers are always getting the best deal available.
Buy to let mortgages differ from residential mortgages significantly, because they cater to a completely different target market. While residential mortgages are taken out by homeowners to purchase homes for themselves, buy to let mortgages are used by landlords to purchase a home in order to rent it out. Becoming a private landlord has in recent years been a popular trend amongst those chasing a bigger return on their investment than is available through a bank, and as the buy to let market has grown so has the demand for flexible, affordable BTL mortgages.
The big difference between a buy to let and a residential mortgage is that a landlord is understood to be a professional making a considered investment, whereas an owner-occupier is likely to be a layperson. This means that the FCA does not require buy to let mortgages to be regulated in the same way that residential mortgages must be; landlords are assumed to understand the risks involved and be able to discern what constitutes an affordable investment. Consequently there are many more buy-to-let mortgage providers than residential mortgage lenders as it’s an easier product to offer, but OneSavings Bank is still able to offer a lending service that stands out from the crowd.
The buy-to-let mortgages on offer from OneSavings Bank feature many of the same criteria that apply to this type of lending across the board, some of which are required by regulatory authorities. This includes testing the profitability of each buy to let property in order to ensure that it will generate sufficient income to cover the cost of the mortgage, a key element of ensuring that landlords aren’t exposing themselves to too much risk.
Commercial finance is an important subsector of OneSavings Bank’s trading activities, and one which requires extensive experience to satisfy effectively. While buy-to-let and residential mortgages are usually provided as a simple, straightforward mortgage solution, commercial mortgages often form part of a more complex financial arrangement which requires an expert touch. It’s common for businesses to minimise the amount of capital they contribute to any single asset in order to reduce their potential future exposure to risk, so commercial mortgages must be able to work alongside other forms of finance.
Commercial mortgages can be used to secure the premises on which a business will be trading, but many businesses will also supply a “second charge” against property in order to raise additional capital. By securitising their property twice over a business is able to acquire a large chunk of capital quickly and easily, which can then be used to invest in upcoming opportunities. However, there is a greater element of risk for lenders when accepting a second charge, because if the loan isn’t paid back they will only be able to reclaim their money once the first lender has been fully recompensed. Because of this, second charge mortgages often come with a higher interest rate than standard first charge mortgages.
Commercial property loans are also inherently subject to a greater number of external factors than either residential or buy to let mortgages, because the borrowing business itself is under constant pressure to remain profitable. Offering commercial mortgages is tough, requiring lenders to remain competitive at every step of the way, and OneSavings Bank is able to carve out a niche in this sector simply because they can offer the very best service at a highly competitive price. Much of OneSavings Bank’s behind-the-scenes operations are outsourced to their subsidiary, “OSB India”, enabling OneSavings Bank to keep all of its communications operations in-house whilst remaining price competitive.
OneSavings Bank offers a specialised second charge secured lending facility through its subsidiary, Prestige Finance. This form of lending is generally used by individuals and businesses to leverage an asset’s value for the purposes of raising capital. As highlighted in the previous section, second charge loans are often perceived as riskier for the lender - if the borrower fails to repay and they need to repossess their assets, the lender holding a second charge will only be able to reclaim any money once all other lenders’ claims have been satisfied. For this reason OneSavings Bank carefully considers all loan applicants before offering a decision, and doesn’t simply provide a checklist for borrowers to fill out.
Understanding a borrower’s specific needs and situation is crucial when offering secured second charge loans, and is an area where OneSavings Bank pays special attention. While OneSavings Bank is extremely flexible and can provide funding in a wide variety of circumstances, there are certain restrictions on the uses to which this form of lending may be put. Notably, a second charge loan secured on a residential property cannot be used to provide business capital; this prevents entrepreneurs from securing every possible asset in a bid to raise sufficient capital. OneSavings Bank restricts their products in such a way because they seek to limit risk to themselves and their customers; many banks will happily allow customers to borrow as much as they like with no thought for the risk implications, but OneSavings Bank takes a proactive approach towards minimising risk.
Second-charge secured loans can still be extremely helpful for residential homeowners, even if they cannot exploit them to start a business. For instance, a loan of this type might help to raise the required funds for a major extension or an internal redecoration project, and as a secured loan it may be cheaper than sourcing unsecured finance from alternative sources. For commercial customers the option to take out a second charge loan is extremely helpful, and can be used to generate capital for expansion and reinvestment.
OneSavings Bank also offers high-quality development finance through another wholly owned subsidiary, InterBay. Through this division OneSavings Bank is able to provide a selection of development finance options to the property development market, including finance for ground-up construction projects. This exceptionally competitive area of finance demands a strong product lineup as well as the expertise to handle large, highly pressured financial contracts; many property development projects live and die by the speed at which their finances operate, so it’s crucial for OneSavings Bank to operate swiftly and confidently when providing development finance solutions.
Through InterBay, OneSavings Bank is also able to source unregulated bridging finance. Bridging loans are an excellent solution for developers whose projects aren’t mature enough to obtain a mortgage, and may be in need of refurbishment or renovation in order to reach that point. Because bridging loans are short term financial solutions there’s no long application process or paper wrangling to complete, and it’s often possible for lenders to make funds available within just one week. Although OneSavings Bank is able to work quickly and effectively to provide financial resolutions they still carry out deep checks on each property to ensure it’s correctly valued and represents a good investment for the lender.
As we’ve seen in this article, OneSavings Bank is well-poised to deliver a wide variety of financial solutions to their clients, and is able to offer bespoke options to each customer. This is achieved by maintaining specialised divisions to handle each element of the business, so that the best parts of each subsidiary are used to the most effect. This serves the customer first and foremost, because it provides the unifying, personal approach that’s so lacking from mainstream banks. Large lenders that try to do everything end up providing a generic, uncaring service to their customers while OneSavings Bank is able to give each and every client the attention they deserve, ensuring that their specific needs are met.
Our mortgage brokers offer mortgage advice on a wide variety of mortgages, more detailed information about the different mortgages can be found below.