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Record number of first-time buyers see Leeds BS gross lending up 97 per cent

  • 30/07/2021
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Record number of first-time buyers see Leeds BS gross lending up 97 per cent
Leeds Building Society has reported a 97 per cent increase in gross mortgage lending to £2bn for the six months to 30 June.


Chief executive Richard Fearon (pictured) attributed the performance to the mutual’s record share of lending to first-time buyers. 

During the period, mortgages lent to new homeowners accounted for 37 per cent of Leeds’ lending. This was made up of 8,600 first-time buyers, which was also a high for the mutual. 

Speaking to this publication, Fearon said he expected the demand from first-time buyers to continue. 

“We saw this huge build up until the end of June and that was the biggest month for completions ever. We lent £535m in one month.  

“We’re confident that we’ll still see good demand and good activity in the market because people have re-evaluated what they want from where they live and saved up but it won’t be at the peak that we saw in June,” he added. 

Overall, Leeds Building Society reported a half-year profit before tax of £70.3m, up from £32.6m last year. 

Fearon said: “In responding to the ongoing challenges posed by the pandemic we’ve remained focused on our core purpose, to help people save and have the home they want, and kept our members at the heart of our long-term business priorities. 

“We’ve supported the housing market at an exceptionally busy time, and supported our existing borrowers by offering mortgage payment deferrals, as well as waiving arrears fees until the end of this year.” 


Green goals 

Going forward, Fearon said the mutual’s immediate goal was to make itself carbon neutral, which he said it was on track to do by the end of this year. 

Additionally, Leeds Building Society will soon be launching green mortgages. 

Considering the mutual’s ethos of catering to under-served borrowers, Fearon said making sure everybody was on board to making the mortgage industry greener was the top of his agenda. 

“I play a role as deputy chair of mortgages, products and service board at the UK Finance to make sure this is a key part of our position. How do we benefit the environment more widely? It is by improving those properties, providing cheaper funding so people can make those improvements and make people aware of that,” Fearon said.  

He also suggested partnering with energy companies both on an industry level and within Leeds. Fearon said industry-wide change would be driven by government policy but added it was up to all players in the sector to increase awareness. 

Fearon said: “There’s a big gap in terms of awareness. There’s a role for everybody to play to get better awareness and we will play our part by having products available.” 

Leeds Building Society will also make public the energy efficiency of its loan book. 


Re-entering and expanding buy-to-let proposition 

Fearon said Leeds Building Society would be relaunching its homes in multiple occupancy (HMO) offering after withdrawing it last year. This will follow its re-entry into the holiday let space in July last year. 

It will also continue on its path of expanding into the buy-to-let sector. 

Fearon said: “We have a longer term aim to move into the professional landlord territory. That takes more time because we’ll have to use different systems and a different route into that market, given its characteristics.” 

As the buy-to-let market gets more competitive, Fearon also suggested there would be room for adjustments with criteria and product pricing. 

The mutual said its arrears remained low and reported “strong levels of capital” with a common equity tier (CET) 1 ratio of 37.6 per cent, up from 34.5 per cent in the same period last year. 

Fearon said: “The pandemic has created obstacles for all of us to overcome but for almost a century and a half, the society’s strength has protected our security and independence through previous periods of economic and social upheaval. 

“The trust of our members and support of our intermediary partners is all the more valued in today’s testing times and the faith they have placed in us, combined with our strong performance, gives me added confidence when I look to our future.” 

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