There are many bankers and many chartered surveyors, but very few are both. Our Director of Debt Finance Greg Manson has recently qualified as a Member of the Royal Institute of Chartered Surveyors, and he shared with us how having the knowledge of both industries gives him an edge when making lending decisions.
I’ve been in banking for around a decade, and during this time have developed a specialism in real estate finance, an industry I was familiar with before. My primary role is to fund property developers and investors on transactions ranging from several hundred thousand pounds to tens of millions. I’ve worked for centuries-old institutions such as Coutts and RBS, as well as new, young challengers like OakNorth Bank, so I’ve a good breadth of experience across the industry. But for the first time in my career, I’m in unchartered territory – this is the highest interest rates have been in 14 years, inflation is causing construction materials and labour costs to spiral, and headline after headline is predicting an economic downturn. I was still at university during the last recession, studying it as it was unfolding as part of my Economics degree…
So, given this backdrop of economic uncertainty in addition to the long-term impact of COVID, I feel that much better about a decision I made last year to apply to become an accredited Member of the Royal Institute of Chartered Surveyors (MRICS). The seed of the idea was planted after a client recommended I look into it. OakNorth Bank was incredibly supportive, giving me time to work on it, and providing me with a mentor who was on hand to answer questions I had about my assessment, the interview, and my submission document.
There are a few ways to become a Chartered Surveyor – the most common is through practice, learning on the job for two years on a structured training programme before sitting an Assessment of Professional Competence (APC). If you pass that (typically only 50-60% do), then you become a Chartered Surveyor and need to complete 20 hours of CPD each year to maintain your accreditation.
The route I took was through something called the ‘Senior Professional Programme’, which you are eligible to apply for if you have relevant real estate experience of 10 years or more. The application process was incredibly robust, but I successfully enrolled a month after first application. Assessments usually take place in April and October every year for my route, so I wanted to fast-track through it so I could sit the assessment in April. Fortunately, my work paid off and I was delighted to receive my RICS accreditation in April 2022.
So, why did I want to become a chartered surveyor?
Put simply, I wanted to be able to step into the shoes of my clients and understand their needs from their perspectives. Bankers receive information as it is provided to them by the client and there can be a difference of opinion between a banker’s perspective and a client’s based on differing experience. In property finance, the majority of borrowers have experience as practicing surveyors, and they use that skill and knowledge to grow their business. By being able to better understand their perspective, I am able to have more robust and impactful conversations with them. Not only does this make for better communication and trust, but fundamentally better deal structures and decisions.
Practically speaking, I also have a more in-depth understanding of property values and valuation reports – why they’re constructed the way they are, what critical factors determine value, the variables that feed into it and red flags to look out for in terms of ethics and conduct such as conflicts of interest. The assessment process and preparation for the interview provided me with an even better understanding of the profession and, as a by-product of that, a better understanding of the market.
There are lots of real estate bankers and there are a lot of chartered surveyors, but very few are both. The ability to look at projects through the eyes of the developer as well as the eyes of the Credit Committee gives me a unique ability to try to find a structure that works within the parameters of the opportunity, rather than just saying “it’s not one for us”.
OakNorth’s own Head of Debt Finance, Ben Barbanel, has noted in a previous article on the state of lending in uncertain times that property development is a counter-cyclical product – i.e. a lender needs to agree to fund in the middle of a down-cycle for something that will be built in 2-3 years’ time – which most aren’t willing to do. What this means is that when the market returns, there is virtually no new housing stock. With a recession potentially coming, this accreditation gives me more confidence in the transactions I’m bringing to our Credit Committee, and the ability to be a trusted advisor to clients at a time when so many other lenders will be turning their back on the market.
By Greg Manson, Director of Debt Finance at OakNorth Bank
