Former Aldermore group managing director of mortgages Charles Haresnape lays out his plans for how Gatehouse Bank will take Sharia loans into the mainstream market.
What are some of your plans for the role?
The remit is to continue with some commercial lending but the main focus in the future is to build a residential lending aspect to the business.
It’s no surprise that residential mortgages is the first on the agenda. At the moment we’re only focussing on that. We’re looking at how we develop the systems and proposition.
For the remainder of this year that’s what we’ll be building. It’s very unlikely we’ll be lending mortgages until the tail end of this year.
We will focus on what you’d expect. Traditional homeowner lending, standard residential mortgages, and also buy-to-let.
We will, like Aldermore, be looking at the full range of buy-to-let, including being fairly specialist on limited company and large portfolio buy-to-let.
I’m very keen on it. The bank already has experience in commercial lending, and that’s relevant experience for large portfolio lending.
We will be looking to have very digitally-based mortgage systems that are fit for purpose, not old legacy systems.
Can you explain the Sharia element of what you do?
The real niche of the bank is it is Sharia compliant. The structure of the loan is slightly different. There is no concept of interest, rather of profit share on the loan.
There are a small number of UK lenders that can do that. That will be our overarching ethos, but the products within in will be fairly conventional.
Our proposition is to have competitive mortgages available to everybody. They are very relevant to people who want a sharia-compliant mortgage but anyone can apply for them. The mortgages are all fully MCOB-compliant and regulated by the FCA.
Part of our remit will be to help people understand what this is and what it means.
Sharia is a fantastic niche. When we build Aldermore we built it on niches, manual underwriting and so on. This is the same sort of thing, but we are pointing this at an even smaller niche.
I think it will look nice and fresh and really invigorate that £3bn a year market of people that only want sharia-compliant. That excludes people that might understand it if they understood it a bit more.
That’s a big potential market that is growing the whole time, and we think it is underserved.
What about your distribution strategy?
The good news for your readers is we will be intermediary-only! It will be mortgage brokers across the UK.
What sort of products will you launch?
At the start we are going for fairly sensible LTVs. It might not be first-time buyers, but it will be a biggish market for it. We haven’t fixed LTVs yet, but it won’t be ultra-high. On buy-to-let we are going to focus on limited companies and portfolio landlords. That’s where the market is moving.
Charles Haresnape is Gatehouse Bank chief executive.