Patrick Davey

An interview with Patrick Davey: 'Today, lenders are much more focused on maintaining good underwriting standards'

In an interview with Development Finance Today, Patrick Davey, head of development finance at Masthaven (pictured above), discusses the state of the sector among growing economic uncertainty, his passion for the banking industry and how he hopes to evolve Masthaven’s development finance proposition.


What do you hope to add to Masthaven in your new role at the company?

I’m looking forward to helping Masthaven evolve its development finance proposition and excited by the opportunities that lie ahead. Development finance is a big part of what we do and Masthaven is really well positioned to help underserved borrowers looking to kickstart projects and support building firms in their quest to access finance.

As you were previously a development underwriting manager, do you believe the underwriting process has changed over recent years?

It has definitely changed, because borrower need has changed and shifted as the years have gone by. In addition, lenders and brokers are, rightly, focusing much more on treating customers fairly these days. Today, lenders are much more focused on maintaining good underwriting standards, balanced with assessing cases in a personal way. In the world of specialist lending that means taking a robust, responsible approach to underwriting, while also recognising that a bit of lateral thinking doesn’t go amiss.

How is the development finance sector currently performing in the midst of an uncertain economic climate?

In Q1 2019, members of the Association of Short Term Lenders (ASTL) lent £92m in development loans — that’s perhaps not as strong as in recent years, but still good given the current economic uncertainty. Overall, though, the short-term finance sector is buoyant — ASTL members received more than £5.9bn in bridging applications in the first quarter of this year — the highest ever. So we have very solid foundations on which to grow.

How did you get into the industry?

I left school at 16 having always (for some reason!) wanted to work in banking. In the 1980s, the culture of banking was very much that you needed to complete professional banking qualifications in tandem with your practical experience while working. So I went to night school for five years and studied for my banking certificate and Chartered Institute of Bankers exams. My personal view is if you don’t understand the banking legal framework or how to read a balance sheet, how can you be expected to make lending decisions? Yorkshire Bank had a very good scheme where they sent six members of staff off to university every year to study for two years and complete a BA (hons) degree in financial services. It’s a shame more banks don’t carry out schemes like this as it pays dividends both for the individuals concerned as part of their personal development, but also providing the industry with highly skilled individuals, who can ensure banks are carrying out safe lending with the correct governance.

If you weren’t in the financial industry, what would you be doing?

Probably politics. I was a city councillor for 15 years, which gave me a great insight into the problems that less affluent communities face and how — without someone speaking on their behalf — the system works against them. Politicians, in general, get a bad ‘rap’ when the majority, whichever party they represent, are in it for the right reasons. Like many, I am frustrated that the UK is still no nearer resolving the Brexit referendum, so if I was not working in banking, I would want to be in Westminster to get this resolved promptly!

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