David Webster told Mortgage Solutions: “High loan-to-value lending is an important niche for us to lend in. Societies do feel a sense of responsibility to make available high LTV lending because that is traditionally what we have been able to do and do that with low arrears.
“I can see more expansion in that.”
Interest-only LTVs had fallen because nobody wanted to be the “last man standing” which meant it was no longer a core product, he suggested, but it remained an important niche: “Interest-only has a place, particularly if it is aligned to an advice proposition.
“Being able to access interest-only will be an important niche for some societies to capitalise on in the year ahead.”
In his speech to the BSA conference on Wednesday, Webster warned about the impact of a 3% leverage ratio proposed by the Treasury on building society lending.
However, while this could force lending down in the medium term, the BSA expects gross advances to be the same or higher in 2013 than the previous year.
