Each month, Mortgage Solutions and Specialist Lending Solutions sit down with a key intermediary industry figure to discuss strategy, the opportunity for brokers and the mortgage marketplace.
This month, we are sitting down with Chris Storey, chief commercial officer at Atom Bank, who has been with the business since 2020.
How did you get into the mortgage industry?
My journey into mortgages wasn’t conventional and I have worked across a number of different areas. I think getting that experience and not being afraid to say yes to a new role that takes you out of your comfort zone is important.
I’ve been with Atom Bank since 2020 and a lot has changed in that time. I’ve had the privilege of helping us to build our presence in the mortgage market, bringing positive change for brokers and borrowers, which is now being recognised across the industry.
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Atom Bank reported strong gross mortgage lending and profit this year. Are there any areas that the firm wishes to grow in, and what are the expectations for lending in the next year or so?
One of our big priorities is supporting first-time buyers and those with modest deposits. These buyers are the lifeblood of the market – it just cannot function properly without them – yet they have historically lacked options.
Atom Bank has consistently offered competitively priced products at 95% loan to value (LTV), but we have also expanded the sorts of properties where they are available. In London and the South East, our products are now available up to 95% LTV for new-build houses and existing flats, as well as up to 90% for new-build flats.
In addition, we have taken steps to improve the amount that higher earners can obtain, increasing our maximum loan to income (LTI) up to six times for those earning above £75,000, and we will continue looking for ways to boost the borrowing prospects of these customers.
On the commercial side, we are determined to support more SMEs with their growth aspirations. It’s been a difficult landscape, but last year was incredibly successful for our commercial division because of our understanding of the needs of business owners. We passed the milestone of £1bn in commercial mortgage completions in 2024 and that’s just the start.
How is Atom Bank differentiating itself from lender competition, e.g., with rates or criteria?
Atom Bank is on a mission to change banking for good and to improve the experience customers and brokers have. That means being easier to work with, producing faster responses, and providing great value for money.
We have become well-known for our speed on residential mortgages in particular, and we are always looking for ways to improve how quickly we can get offers back to brokers. Our changes are yielding impressive results; the time from application to offer has been just under three working days on average over the last four months, with around 30% going through the same day. Certain cases have been extraordinarily quick – we had a case with Finamply this year where we delivered an offer in just 12 seconds. Compared with the industry average of 11 days, we are going above and beyond in this area to ensure we deliver a faster journey.
We also stand out because of the way that we look to help under-served areas of the market. That’s true for both the residential and commercial market.
A great example is near prime. The last few years have not exactly been short on financial challenges, from the pandemic to the cost-of-living crisis, and that has inevitably had an impact on the number of people falling into the near prime category.
But, too often, these borrowers find it incredibly difficult to obtain mortgages, because lenders have quite outdated criteria. But we have made our products more accessible, by increasing the level of acceptable unsatisfied registered defaults and reducing the ‘look back’ period for defaults.
We have also got a clear path back to prime, so that if the borrower’s circumstances improve, we can automatically offer them a prime rate when their fixed term comes to an end.
Commercial mortgages are a key area of Atom Bank; where does it see the opportunity and challenges in the coming year?
After a really tricky few years, confidence among businesses is growing. We have seen it first-hand in terms of our own activity levels, while the commercial brokers we poll in our quarterly Pulse surveys are reporting seeing greater interest in borrowing from their SME clients too.
Atom Bank has built a reputation for our common-sense way of handling commercial mortgages, the way that cases are assessed on their individual merits and borrowers receive bespoke pricing. There is a real opportunity to build an even bigger profile in this sector, by continuing to support businesses in achieving their growth plans.
Speed is huge in this market – business owners want to know where they stand, just like residential borrowers, and we have made great strides in delivering a faster process. Our average time to deliver an agreement in principle is now down to the same day, thanks to sensible automation alongside human expertise making the whole process more efficient. We had a case recently that moved from application to completion in just 39 days, and these sorts of timescales are becoming more common.
We will continue to be relentless in delivering neat, intuitive, simple processes that deliver the speed and ease that brokers and their clients demand.
The big challenge really is the economy itself. Things look stable now, and that’s helped boost the confidence among business borrowers, but we have all seen how quickly that can change.
Atom Bank joined the Growth Guarantee scheme this year. Can you talk us through the decision behind that and what the first months in the scheme have been like?
Atom Bank was one of the biggest participants in the predecessor of the Growth Guarantee Scheme, the Recovery Loan Scheme (RLS). We delivered more than £250m in funding to smaller businesses through the RLS, without incurring a single fraud loss.
As a result, it was a natural progression to seek accreditation for the Growth Guarantee Scheme. These government-backed schemes have played an integral role in supporting businesses in getting back on track following the tumult of the last few years, in the aftermath of the pandemic.
We are passionate about delivering options for small businesses with growth aspirations, and the Growth Guarantee Scheme is a fantastic vehicle for us to do just that. Importantly, it’s just one element of what we are doing to back businesses. The new scheme has a cap of £2m on what can be borrowed, for example, whereas we have taken steps to provide even greater support for those looking for larger sums, with a 0.25% discount in place for those borrowing between £1m and £4m. We are also facilitating more substantial loans, considering cases of up to £10m, recently completing our largest ever deal – a £9.95m facility.
What is the current headcount of Atom Bank and are there any areas of the team that it is looking to grow in?
We currently have around 550 people.
Realistically, we are never going to be a bank with thousands of members of staff, as our model is built around being lean and cost-efficient through the smart use of technology and automation. We will still have human expertise, ensuring we make sensible underwriting decisions, but augmented by technology and data.
That said, we are always keen to add talent to our ranks, for example through our recent expansion of the business development manager (BDM) teams. Doing so has meant that we can deliver an even more efficient experience to our broker partners, and by extension, their clients. We work incredibly closely with brokers, utilising their feedback on products and processes, so a larger BDM team not only means we can continue to deliver incredible speeds to offer, but also pinpoint further areas of improvement.
We are also focused on bringing in the next generation of talent, and brought in a new batch of interns over the summer. It’s those young people, and their fresh ideas, that can really help us deliver in new ways for our customers.
As a bank, we are committed to helping develop young people in the North East, where opportunities can be few and far between. Back in April, we launched our Atom Futures Fund, in partnership with Point North. It’s aimed at improving access to higher education for young people in the region, and is just one of the measures we are taking to boost the opportunities for those in the North East.
What are the bank’s plans around distribution?
Brokers have always been at the heart of how we distribute our mortgages.
We are always looking for ways that we can work more closely with brokers, utilising their feedback to refine our products and the processes in place, and that will continue.
We have an engaged panel of brokers, and while we do look at areas where we can expand and bring new firms on board, we will never do this at the expense of our service levels. We want to ensure that brokers and their clients have a first-rate experience with Atom Bank, so that will always be one of our key priorities.
What is the funding landscape like at the moment? Is Atom Bank looking for further equity capital or targeting more savers? Do you think specialist lenders may go down the bank route?
We have had a period of significant volatility in interest rates, along with intensified competition among newer players in the market who are actively seeking to attract and retain savings customers.
We have always had a focus on providing competitive savings rates, which is often in contrast to traditional high street banks. With the base rate now falling, it will be interesting to see how the big players react, particularly with Consumer Duty in mind.
We have just launched a brand-new savings product, the Instant Saver Reward, which offers something a bit different to other products in the market along with a very competitive rate. Like our mortgage offering, we want to offer a wide variety of savings products that are easy to use and that offer exceptional value.
What is one thing you would want brokers to know about Atom Bank?
I’m going to name two.
First is the market-leading speed to offer. It’s so often overlooked how important speed is in this industry, which is astonishing really. We have brokers and borrowers left in limbo, suffering sleepless nights because they don’t know where they stand. We have focused on finding ways to speed up the whole process and make sure that offers are delivered quickly. We have had some incredibly quick cases that brokers often shout about – we can often deliver an offer in seconds, which is incredible. And that’s an actual offer, not just subject to valuation or any other form of verification.
I’d also highlight the sensible underwriting that you get with Atom Bank. We cherish the feedback we get from brokers, and use that to build new, quicker solutions for their clients, based around policy process and price.
The success of the near prime proposition has been a great example of that sensible, considered underwriting in practice, but that focus on judging cases properly on their merits stretches across all of our lending. It means we can support our growing number of customers, and meet their individual needs.
