In its latest results, the mutual said its mortgage balances grew by £3.1bn to £46.6bn in 2021, which is more than double the growth in 2020.
Its mortgage balance growth was 7.2 per cent in 2021, which compared to three per cent in 2020. It said that this was above mortgage market growth of 4.6 per cent, which is based on Bank of England figures.
Within the £46.6bn of total mortgage assets, £27.4bn came from owner occupier loans and £19.2bn were buy-to-let (BTL) loans. The average loan to value (LTV) of the mortgage book stands at 50.9 per cent, which is down from 52.8 per cent in 2020.
Both owner-occupier and BTL segments increased and were £25.7bn and £17.7bn in 2020 respectively.
It added its number of first-time buyers had doubled to 7,100 from 3,200 in 2020.
The lender said that it had also repurchased two buy-to-let loan portfolios for around £500,000.
The mutual’s profit before tax came to £233m, which is up from £124m. It said this was driven by balance sheet growth, improved margin and the release of £29m of pandemic-related provision to cover potential future credit losses.
Coventry BS said the end of the stamp duty holiday had led to “record purchase and redemption activity”, and that there had been a rise in remortgage and product transfers towards the end of the year ahead of expected interest rate rises.
It added that the strong labour market had helped support demand for new mortgages and continued repayment of existing mortgages.
It noted that arrears remained at the low level of 0.1 per cent, slightly up from 0.09 per cent in 2020.
Coventry BS said it had granted 40,000 mortgage Covid-19 payment holidays in 2020, but none of these were active by the end of 2021.
The lender said it strategy remained focused on “high quality, low loan to value first charge mortgages within the prime residential market”, and these were primarily distributed through third party intermediaries.
Steve Hughes, chief executive of Coventry BS, said: “We delivered a strong financial performance and made good progress against our strategic goals. This performance reflects an exceptional commitment to members and customers by my colleagues across the society and I am so proud of what they have delivered. We continue to focus on running the society in the long-term interest of our members and ensuring that we are set up for long-term success.”
He said that the first six months of the year had been a “buoyant market” because the stamp duty holiday had delivered “record volumes of mortgage applications and completions” during that period.
He added that the lender had “felt the challenge of the low interest rate environment”, and that accumulated household savings had created excess funding which had led to “significant competitive pressure” in the mortgage market in the latter half of the year and that this would continue into 2022.
Improvements in technology and demand for green mortgages
Hughes said that it had made “big progress” on its digital journey, and its multi-year programme to make mortgage offers more tailored to borrowers and better for brokers was “delivering tangible results”.
He said borrowers could complete product transfers online via a self-service capability, and this could also be used for buy to let and owner occupier products.
“It is a better service for borrowers, adds scale to our business, reduces risk and is more operationally efficient,” he explained.
He added that brokers like the webchat support it had launched this year, and it complimented its intermediary support teams.
Other technological improvements include redesigning its website and upgrading its online services.
Hughes said that it had redesigned and refurbished 50 branches, and it was on schedule to complete the refurbishment of all remaining branches during 2022.
The lender said that there had been “modest demand to date” for its Green Together Reward, which offers incentives for new and existing borrowers to improve the energy efficiency of their property.
Hughes said: “The modest demand to date, however, shows that industry, government and homeowners collectively have more to do to address the energy inefficiencies of UK housing stock. We see our support for this in the coming years as an intrinsic part of our purpose and strategy.”
