In its latest results, Leeds Building Society said it saw nine out of 10 of its busiest lending days ever in 2022.
The firm added that record net lending rose from around £1.5bn in 2021 to £2bn.
Total mortgage assets stood at £20.3bn, up from £18.3bn, another record-high.
The company also delivered a record profit before tax of £25.5bn, which is up from £22.5bn in 2021, and cost income ratio was pegged at 37.4 per cent. This is a fall from 43.9 per cent in 2021.
Speaking to this publication, Leeds Building Society’s chief executive Richard Fearon (pictured) said that first-time buyers and shared ownership had been two areas that were a “success story” but in term of homeownership there had been growth “across the board”.
The building society added that it had helped 18,000 first-time buyers, which represents around a third of its new loans.
It noted that the mutual accounted for around 3.4 per cent of the UK first-time buyer market, which is three times its normal market share.
“First-timer buyers are a big priority for us… we punch way above our weight in that space,” he added.
Fearon said it was “tough to predict” first-time buyer numbers for the upcoming year but it hoped to achieve the same or higher numbers in 2023.
“Affordability is a big factor and saving up a deposit is the other critical factor. We’ve got propositions on route that will help with both of those things. Whether that is helping people save a deposit, or helping with the affordability side of things,” he said.
He pointed to its green mortgage product which includes the energy efficiency in the affordability calculation so borrowers can borrow more and don’t need to save as large a deposit.
Fearon said: “I do think there are headwinds, I think the market size is reducing and transactions and activity is reducing so that will be more challenging for a number of players across the market.
“I think we will make sure that despite that, we focus around our purpose and we are focused around supporting members.”
Mini Budget pricing has unwound to ‘large extent’
Regarding pricing, the firm said that society had increased its standard variable mortgage rate by a total of 1.7 per cent, which compares to the 3.4 per cent increase in the Bank of England base rate following the nine increases since December 2021. The base rate now stands at four per cent.
Fearon said a “large extent” the impact of the mini Budget on mortgage pricing had “unwound”.
“That is a reflection of just what a diverse, competitive and resilient market the mortgage market is. I think that goes both for lenders who are keen to lend but also brokers.
“Brokers play such a key role in helping people navigate the mortgage market, particularly after the mini Budget. It was such a challenging time. I want to take this opportunity to acknowledge it. They’re a really vital part of the success of the society and I’m really keen to emphasise how much we value our broker partners,” he noted.
Arrears fees to be waived until 2024
Leeds Building Society said it would continue to work with those at risk of financial difficulty and offer initiatives such as tailored arrears guidance.
It added that it would extend the waiver of arrears fees until at least the beginning of 2024. The firm confirmed last year that it would not charge any arrears fees for a select period.
The firm waived arrears fees during the pandemic and has kept the measure in place.
“We’re doing that because we think it’s something we can do with our financial strength to support our members,” Fearon noted.
The lender added that brokers remained crucial to its success and it had improved processes to reduce application to offer times which in some cases could be done in seconds through automation.
Fearon said the mortgage hub platform had allowed a lot of automation so it could get a mortgage from application to offer in a minute and in under 30 seconds in some cases.
He added that it was investing further in technology to improve its product transfer and further advance process, and that it would be looking to recruit further on the technology side. Currently around one in five colleagues at the mutual are in technology roles.
Affordability at worst point for 148 years
Leeds Building Society said housing has never been less affordable in the 148 years since the mutual was founded and called for the development of a “long-term plan” for housing that could deliver more homes, support first-time buyers and extend affordable routes into homeownership.
“I think that is that is a really sad reflection of decades of government inaction in terms of tackling the housing crisis, so we’re really keen to continue to call that there needs to be a long-term plan to deliver more homes, that we will continue to play our part supporting homeowners and first time buyers, but we call on the government to play their part,” Fearon said.
Last year, Leeds Building Society released a report outlining seven recommendations on tackling UK homeownership issue.
This included building more homes, tackling the skills gap in construction, maximise the potential of existing properties, building sustainability into the housing market, increase routes into homeownership, help people to save for a deposit and provide meaningful support for borrowers.
Fearon said the recommendation around building more homes included the government sticking to its manifesto commitment to building 300,000 homes a year.
“I think unfortunately, some of the legislation that’s going through the House of Lords at the moment probably will take us in the opposite direction,” he said.
Fearon explained that the Levelling Up and Regeneration Bill has suggested making this target advisory, which he said has “watered down the power of the planning inspectorate”.
“It’s estimated that scrapping them could lead to 100,000 fewer homes a year being built and deprive the economy of £17bn in housebuilding and supply-chain output,” he added.
He added that there had been around 16 housing ministers since 2010 and that was “no basis for any sort of long-term thinking”.
