Compared to the previous year, this was up from its gross mortgage lending figure of £5.4bn in 2021.
The mutual completed almost 30,000 mortgages while 17,000 existing customers switched rates.
Skipton Building Society supported 13,800 first-time buyers.
Stuart Haire (pictured), group chief executive, said Skipton’s structure, which encompasses the Connells Estate Agency, Connells and Countrywide brokers and Countrywide Surveying Services, provided the mutual with a unique intel of the market which resulted in first-time buyers making up nearly half of its completions.
He said: “We get quite good insights from the broker community about where there’s a thin market or where there’s no market. We’re increasingly thoughtful about how we can help more people onto the housing ladder.
“Overall, the mortgage business had a great year.”
Consistent service
Its mortgage portfolio grew by 9.6 per cent to £25.5bn, and net lending accounted for 3.6 per cent of the UK residential mortgage market’s growth. This is in comparison to the 1.5 per cent market share that Skipton Building Society holds.
Haire attributed this to the faith the mutual had built up with brokers, saying “they trust our service”. He pointed to the mutual’s turnaround times and consistent credit policy too.
“They [mortgage brokers] are very clear with us about what it takes to do business with their customers. You don’t need to be best buy, you need to be consistent… so the broker is comfortable recommending us to their customer because it’s the broker who will have a difficult situation if the lender lets them down.”
Supporting savers and borrowers
The mutual also commended itself for passing just 1.5 per cent of the Bank of England’s 3.25 per cent base rate increases onto mortgage borrowers on a variable rate. It said this saved them an average of £1,300 per year.
Haire said the mutual did this to support its members, noting that a few of them were on its standard variable rate (SVR). He said those who were on the SVR were there for a reason, so it did not feel right to exploit that.
“I’m not suggesting passing on interest rates isn’t being fair. But ultimately, we felt it would be better to price-support them as the cost of living increases.”
He said Skipton aimed to support its members and the money deposited ultimately belonged to them.
“We make profits, that’s their profits. It’s about reinvesting that back to support them. Sometimes in difficult times when interest rates go up, if they’ve managed to save money we make sure we have very attractive rates,” he added.
Its net interest margin rose from 1.03 per cent to 1.35 per cent annually while the mortgages and savings division saw pre-tax profits of £220.1m in 2022, up from £172.2m in 2021.
Some 285 mortgages were in arrears of three months or more, which represented 0.17 per cent of its portfolio. This was better than in 2021 when 371 cases were in arrears, making up 0.23 per cent of its book.
International opportunity
The group’s offshore bank Skipton International Limited reported pre-tax profits of £39.9m, up from £25.5m in 2021 while its mortgage balance rose from £1.7bn to £2bn.
Haire said this part of the business, which lends to expats and foreign investors, had an “incredible year”.
“It’s very much against the headlines which say the UK isn’t the place to invest, that’s not what we’re seeing in Skipton International,” Haire added.
Meanwhile, the wider business generated a pre-tax profit of £298.8m, up from £271.8m.
Skipton increased its loan impairment provisions to £17.1m for the year, higher than the £12.9m it released in 2021. It put this down to economic assumptions which indicated an “adverse” outlook.
Looking ahead, Haire said any falls in house prices would simply be a correction and predicted that the market would “settle bank into a reasonable space”.
Getting off to a good start
Haire was announced as the group chief executive in June last year and officially took up the post in January.
He said one of the perks of being part of a mutual was working towards societal aims. Haire said the lender was also able to use intelligence from across the group’s companies to build “medium-term propositions and take a more patient approach to risk”.
He said the estate agency business was reporting a rise in buyer demand in Q1 which would inevitably convert into sales and then mortgages.
“There’s a good opportunity in the market and our position in the market, particularly pointed towards first-time buyers, is using the insights we have on where there’s thin credit availability and to make sure that we’re playing an appropriate role in helping people onto the housing ladder,” Haire added.
He suggested that the mutual was looking at innovative ways to help potential first-time buyers who were struggling with affordability.
Haire said the most exciting piece of work Skipton was doing was with its subsidiary Vibrant Energy Matters.
The two companies launched an initiative in November and saw the mutual set aside £11m to give members a free Energy Performance Certificate (EPC) plus report so they could work towards making their homes greener.
Haire said it would put the issue of retrofitting homes at the front of mind for its members.
“This is a really important new capability that can be widely deployed onto the housing market.
“I’m very proud of it and excited about its future,” he added.
