Straight talking: Fincorp’s Matthew Anderson takes the hot seat

Matthew Anderson likes to be controversial. So controversial in fact that before we start this interview, his colleague and fellow director at Fincorp Nigel Alexander warns him half-jokingly, half deadly serious: “Nothing too controversial!”

Anderson is not so easily deterred.

“What’s the biggest risk facing this market in the next three years? I suspect it is the possibility that as interest rates rise a huge number of people who are already teetering on the edge of what they can afford will be tipped over into the abyss,” he says.

“The Bank of England has already signalled that it expects to start raising rates from next year, and even if they do this gradually I worry that we will still see more people fail to keep up with their mortgage payments.”

He is not alone in this fear – indeed the Bank of England’s governor Mark Carney has indicated the Bank is only too aware that this is a significant risk and could damage the UK’s recovery severely. But how does it impact on bridging?

“The problem is this will set the whole property market back,” explains Anderson. “Interest rates are going to go up. The problem is there are a great number of people, even people I know personally, who, even with rates as low as they are, are teetering. The ability to refinance mortgages as people come off fixed rates or variables is going to become increasingly difficult. The vast majority of people of my generation are on interest-only mortgages – well you can’t get those anymore. If you’re struggling to pay your interest payments every month and you have to move to repayment, it’s really going to hurt.

“This sort of thing is going to slow the property market right down. We are not going to see property prices plummet by 30% again but it will stall the market. The ability to refinance and the ability to sell is going to be hit hard. It will become more difficult and it will take longer.”

His concern is that this will lead to more properties being sold at auction at knock down prices. And that this could hit investors’ returns.

“It’s a combination of all of these risks that poses the biggest challenge for our industry,” says Anderson. “There are some very big fundamental problems in our economy that no political party is addressing and at some point, whether it’s in the next three years or longer, we’ll see some fall out from that.”

Anderson’s view is strongly held and many may find it a bit shocking when we are seeing headlines welcoming the UK’s recovery on a weekly basis. But despite this he is right – it is a risk. 

But this is why Anderson and his colleagues at Fincorp, which was founded 26 years ago, have lasted the course through three recessions and property market crashes when many other lenders have gone to the wall. Being aware of the risks and planning contingencies for them is what sets experience apart from rooky and over zealous lenders.

And Anderson has experience. He joined Barclays Bank in 1983 and spent six years learning the ropes in corporate lending. From there Anderson made an interesting move, to corporate lending at Bank Leumi, the UK’s biggest Israeli bank. 

“That was a real learning curve,” says Anderson. “I went from a culture of the customer’s always right to the customer always wants to argue. But it was a really good training for getting complicated deals done.”

In 1992 Anderson had a belated gap year (or two), travelling around New Zealand, Australia, Bali, Sumatra and Hong Kong which, he jokes, meant he spent the early 90s recession “on the beach”.

By 1994 however he was back in the UK and it was then that Anderson made his debut into property lending at Fibi Bank.

“I’d always thought of property lending as dull,” he admits. “You buy a property, stick a coat of paint over it and sell it on. What could possibly be interesting about that? Well, I had a really interesting client at Fibi Bank who took me out with him to various developments in central London one day and I just got bitten by the bug.”

In 1996 he was offered a job at Wintrust, a bank which specialised in property lending and development in particular, and it was here that he met Nigel Alexander. Both Alexander and Anderson spent a good deal of time at Wintrust, honing their lending experience and in 2003 Fincorp’s founding director Ronnie Natas approached Alexander to set up a “Wintrust-like” development lender for Fincorp. Anderson followed just a year later.

After just shy of 10 years at Fincorp, what has been Anderson’s favourite thing to date?

“Because of its size, Fincorp has a flexibility to its approach that I enjoy and find challenging every day,” says Anderson. “No two days are the same and both Nigel and I have a good deal of responsibility and autonomy to take the business where we think there are good opportunities. That’s very satisfying. The flexibility and adaptability just makes it more interesting.”

So which are the areas that Anderson thinks offer opportunities at the moment?

“My background is really in development finance and I think this is beginning to turn a corner,” says Anderson. “This market hasn’t really been there for a good few years now and I’d like to get back to that if we can and it makes sense.”

While he won’t confirm if Fincorp has solid plans to expand into offering development finance he does acknowledge that it could be a complement to the existing business Fincorp has, which now focuses solely on short-term finance – bridging.

And although Anderson is clearly setting his sights on what the future might hold for the business he doesn’t forget to doff his cap to where Fincorp has come from.

“The bridging market may be niche but there are some great characters and personalities in the industry and it’s been a real pleasure working over the past ten years with them,” he says. “Same goes for the auction houses – strangely enough despite what’s happened to the property market there are a lot of the same faces.”

Bridging has moved on despite this consistency of personality however, Anderson is keen to point out. The recent launch of yet another new short-term lender is testament to the ongoing attraction of the bridging market for lenders. And their numbers have multiplied in the past five years.

“I think these new entrants to the market have brought some established lines of funding with them and with that, they’ve also brought a certain degree of credibility to bridging,” says Anderson. “In the past there was an image of bridging as lenders coming to collect on a Friday night – that’s definitely not the case now. I think short-term lenders today that want to compete have had to streamline their approaches and become much more sophisticated. It's been a good thing for the quality of the market overall."

Straight-talking indeed. But as well as erring on the controversial side, Anderson is also demonstrably honest. He says it how it is and as a result he speaks with integrity.

So while he might shock with warnings of a challenging market to come in the new few years, you also get the impression that with Fincorp, you're in good hands.


Name: Matthew Anderson
  Surbiton – yes “The Good Life” – yawn!
Wife and two sons
In Nigel’s (Alexander) eyes the worst kind – public school – “no idea about the real world!!”
Rugby or football?
Played a lot of rugby and have coached it too. But now have two sons into football.
Family are Chelsea – my grandfather was a pro and had a couple of seasons there, but are AFC Wimbledon season ticket holders.
Tomato soup or baked beans?
  Tomato soup
Ketchup or brown sauce?
Laurel or Hardy?
Home or abroad?
Mornings or evenings?
  Neither – sometime around midday.
Proudest professional moment?
Since joining Fincorp in 2004 we built a loan book of development finance, we repaid it without losing our investors a penny and we’ve build another loan book in bridging as well. To do that successfully twice in the conditions we have over the past ten years says an awful lot the management of this company and I’m very proud to have been part of that.
Proudest personal moment at Fincorp?
To have been able to raise in excess of £30,000 for the Cystic Fibrosis Trust last year has been great. My son suffers from the disease and what started as a small aim to raise some money has completely blown me away. I’ve also been hugely touched by the personal conversations I’ve had with clients and brokers about it. It has really personalised business for me.