7 minute read
Vic Jannels
TAB founder on his formula for success
Bridge lending specialist brought first company to life at 17
Duncan Kreeger
Duncan Kreeger, CEO and founder of specialist bridge lender TAB, founded his first company at the tender age of 17.
Take a moment to reflect on that.
He ran his fledgling business from his bedroom, learning the ropes and making all the sorts of mistakes you’d expect of a neophyte. Yet that apparently rebellious and entrepreneurial spirit that saw him leave school because “I’m just not very good at being told what to do” seems to have served him more than adequately in the succeeding years.
“I’ve never been scared of hard work. I like getting up in the morning, so I think it’s a kind of mindset,” he told Mortgage Introducer.
To understand that confidence, it may help to dwell a little longer in his past. His early interest in property may have been passed on from his father, who was a mortgage broker. “As much as I hated being at school, I was thirsty to learn – and what I wanted to learn more about was property,” he said.
Kreeger worked in his father’s office for a time and, after qualifying as a mortgage broker, he ended up doing bridging loans. Eventually, with helpful advice from a mentor and colleague, he started his own bridging loan business. Later, unhappy with the business arrangement, he started talking to investors about branching out.
“We were never afraid to throw our hands in the air if we didn’t understand something. And that is the type of mentality that I’ve tried to maintain and pass down to those who helped me.”
Unfazed by problems (“There are always challenges – my full-time job is problem solving”), he said he enjoys it “when things get thrown up in the air,” adding that he does not get stressed. “I’m extraordinarily lucky in that I see the world through rosetinted glasses,” he said.
That derring-do attitude has become part of Kreeger’s business DNA. According to the company’s blurb, Hertfordshire-based TAB, which he founded in 2018, homed in on lessorthodox property projects that “didn’t fit well within the constraints of traditional lenders’ more rigid” criteria from the start. To date, the company has reputedly made £179 million of loans.
Mirroring its founder’s act-swiftly, outside-the-box thinking, TAB’s business ethic is more than just about offering a simple lender-borrower transaction.
“We are keen not to say ‘No’ to things because of preconceived ideas about what’s good and what’s not. We want to add value. We don’t always come into our own where somebody has got a very cheap offer and they’re looking to better it just purely based on numbers, but I’m a very strong believer that this type of finance can assist with much more than just ‘I need to borrow X and you’re able to lend it to me,’” he said.
TAB reported record business in April after closing 11 loans totalling £23.69 million – one of which was the firm’s largest-ever single loan (£13 million). This came hot on the heels of an equally record-busting February and March, when it posted its best-ever figures for that month.
Much of TAB’s armoury is heavily reliant on tech, designed fully in-house to keep costs under control and to allow a more agile response to changes in the market. “The IT guys don’t just keep the show on the road – they’re developing stuff for you. We don’t outsource any development at all, and we’re very proud of that.”
But while technology underpins much of the company’s strategy and many of its future plans, Kreeger stressed that it should not be at the expense of a more human touch.
“I’ve been extraordinarily focused on building technology that I think will add value to us as a business and to all of our stakeholders, but not [at the cost of] having a personal service and people with a brain to talk to – we felt strongly that we want to do both,” he said.
Kreeger readily admitted that finding a niche in a crowded and highly competitive market was not easy, but for him the key was to “do the basics well.”
He added, “We’re not too focused on having funky USPs [unique selling points] … and trying to create complicated products. At the very start of TAB, we talked about lending in black-and-white. We want people to understand what they’re entering into and make it as simple and easy [as possible],” he explained.
Kreeger said he was confident the company would be in a good position to ride out the recession most economists are now expecting will hit later this year, and he passed on a piece of advice that has so far kept him in good stead, along with a mixture of disarming honesty and a common-sense approach to business, that he learned from a close business colleague.
“Surround yourself with good people and treat them the way that you would want to be treated,” he said. “People will still pick up the phone to [call] me after all these years because they know they’ll get an honest answer. If I say, ‘That is something we can do,’ then I will try my best to make it happen.”
“It is an interesting time for the market”
Director gives his verdict on a particularly eventful period
The housing market is currently undergoing a particularly eventful period, with the Bank of England upping interest rates, the energy bills crisis, and the RussiaUkraine conflict all taking their toll.
“We are in very interesting times with a number of factors coming in to play that will affect the housing market and particularly the rental sector,” according to Jim Baker (pictured), sales director of bridging at Spring Finance.
Increasing interest rates and inflationary pressure on household income have meant funding a firsttime property purchase has become increasingly difficult, particularly with house price values seeing a significant increase in the last 12 months.
The average price paid for a home in England and Wales in April was £372,436, up £3,600 on the average price paid in March, according to the e.surv Acadata House Price Index. For the sixth time in the last seven months, the figures hit a new record level for England and Wales.
Baker stated that this demonstrates that high demand for rental property is likely to continue for the foreseeable future.
“Increased costs for landlords will also be reflected in a likely increase in rents over the coming year,” he added.
Baker believes that landlords will continue to seek ways to increase their portfolio or indeed look to maximise income on their units with the continuing trend for HMO conversions.
“With the increase in property values, landlords will be looking at ways to tap into this equity to fund deposits to increase their portfolio, fund HMO conversion works or meet the cost of complying with the EPC requirements,” he said.
He explained that this opens up a significant opportunity for lenders to provide secured loans on existing buyto-lets. “There is no doubt this will be one of the big growth markets over the next 12 months,” Baker said.
According to Baker, the bridging market too will face a continued balance of opportunity and challenge over the next 12 months.
Housing stock continues to remain in high demand and the speed at which this is moving creates both a demand for traditional chain break bridging loans, but also a risk of quick sales negating the need for a bridge. Baker said it will be an interesting watch to
Jim Baker
see how this space plays out with the current race to the bottom challenging the commercial sense of these deals.
“The inflationary cost-of-living pressures in addition to the ongoing of impact of COVID will undoubtedly see credit profiles impacted and showcase the greater need in this space for specialist bridging,” he said.
In addition, Baker believes that in the homeowner market, with such limited new property, there will be an uplift in demand for funding for extensions, conversions and enhancements such as garden rooms. Second charge regulated bridging, particularly for heavy refurbishment projects, according to Baker, will enable homeowners to carry out these significant works.
He also believes greater innovation is needed in the market, with the likes of base rate tracker deals which he said have never really been seen in residential bridging.
He concluded, “We are entering uncertain times, but it will be a market that is full of opportunity and growth, particularly for specialist bridging.”
