The lender has broadened its proposition with product launches, rate cuts and criteria changes since new chief executive Dan Frumkin set out plans in February 2020 to diversify the range and increase returns across the bank.
Charles Morley, director of mortgage distribution at Metro Bank (pictured), covering intermediary and direct sales, said the mortgage business had largely stuck to its earlier agreed strategy to grow non-vanilla lending after the Covid-19 lockdown began in March 2020.
“We had a digital valuation solution so we kept lending, and were one of the first to re-enter the 90 per cent market. To us, that was really important. It was setting out a stall that we want to innovate, to be different and to get products into the marketplace when customers and brokers need it,” Morley said.
Specialist mortgages grew to account for 80 per cent of all applications by Q4 2020, a reversal from earlier in the year when the majority were vanilla cases. Overall application values had reached £450m to £500m in Q4, according to the annual report.
“Undoubtedly, we have had a lot of success with the ranges we have brought out. Joint borrower sole proprietor, the professional range – they have proved very successful and we will develop and tweak them as we move forward.
“Whenever you launch a product, it’s never where the product ends up. You evolve based on feedback from the market,” Morley said.
Metro has invested significant amounts into technology this year, which will enable further expansion of the mortgage range into new segments of the marketplace.
However, Morley refused to be drawn further on the details. “The last 12 months we have demonstrated that what we want to do is significant,” he said.
A large amount of changes to the mortgage offer have flowed through since last spring. Highlights include softening stress tests and raising the maximum age to 85 on buy to let (BTL). The lender launched a near-prime range in March.
Then followed expansion of the professionals range in May, to include surveyors, engineers and architects, and anyone earning £100,000. Also in May, the 95 per cent product was extended to remortgages.
Just this month, Metro added two and three-year fixed rates at 95 per cent. “We’ve probably brought more criteria changes and more introductions to the market than most lenders in the past 12 months,” Morley said.
The expansion was supported by 25 new hires including underwriters, business development managers and telephone service agents.
Morley, who was previously head of sales of Kensington for 13 years before joining Metro in 2014, added: “The days of a BDM being out on the road for five days a week is finished. I don’t see that continuing. The more successful teams in the UK mortgage market will be using a combination of video calling and face-to-face.”