"We have seen rents paid by tenants increase rapidly across the country and as a nation we have not had a coherent housing policy for many decades."
FR: Tell us a bit about your background and interests outside work?
I was born and brought up in the West Riding of Yorkshire and have worked in financial services for some 35 years. Before joining Skipton Building Society as a business development manager in 2001, I had been the branch manager of a high street bank. Outside work I was a football referee reaching Grade 4 and once sent off two players from the same team for punching one another other! In addition to football I was a keen cricketer in my younger days playing at County Colts and County League level. On retirement from cricket I qualified as an umpire and am on the panel of the Yorkshire Premier Leagues and aiming to progress to the National Panel.
FR: And your role at the Family Building Society?
I joined Family Building Society as its first ever BDM in 2015, building relationships with mortgage brokers, packagers and other intermediaries along the M62 corridor, the North and North East, a role vital to the development of Britain's first new mutual lender for more than 30 years. Around 90% of the Society's lending, which celebrated its tenth birthday in July this year, is through intermediaries.
FR: What is significant about the Society's approach to underwriting?
We know from the feedback brokers give us is that they and their non-standard clients really do appreciate our case-by-case approach to underwriting loans. There is no hard and fast rule and we examine applications on an individual basis whether the borrowers are old, expats, professional landlords, self-employed or those whose income fluctuates from month-to-month, season-to-season and year-to-year, or perhaps all of them!
FR: Why is it so important for mortgage providers to offer products specifically for underserved groups such as older borrowers?
We pride ourselves in lending to would-be borrowers who are underserved by the major lenders, notably those in later life.
Times are changing. Paying off one's mortgage was always considered to be a champagne moment, but perhaps no longer. Taking out even a small mortgage against a residential property means that it is removed from one's estate for inheritance tax purposes. There are of course others whose mortgage term has come to an end and perhaps don't realise that they can borrow again, to raise funds to assist family members financially, or make a fresh start in later life.
FR: Would you say that it is important to educate brokers to study the whole of the market?
That's right. As niche lenders, we need to make them aware of what we offer - particularly to underserved borrowers. Going back to those in retirement, borrowing against one's pension plan and/or investment portfolio is an innovation that niche lenders have pioneered. At Family Building Society we will lend up to 90% of the value of a pension pot whether it is in draw down or not. It is an appealing proposition, particularly as the take up of retirement interest-only (RIO) mortgages has been disappointing throughout the industry.
FR: Are you stressing the importance of innovation, too?
Yes, I am. Take joint borrower sole proprietor mortgages. They are playing useful role in lending, but not only to those in retirement. Increasingly, we see examples of children supporting their parents financially - a sort of Bank of Mum and Dad in reverse.
FR: What are the most challenging issues facing the market today?
The real issue facing today's would-be home owners is the shortage of housing. We have seen rents paid by tenants increase rapidly across the country and as a nation we have not had a coherent housing policy for many decades. Time will tell if the new government's pledge to build one and a half million decent new homes of the right type in the right place during its term in office comes to fruition and really does solve the housing crisis.
FR: What other challenges routinely face brokers serving their clients?
Generally, providing loans to those who are underserved by the major lenders remains the real challenge. Also brokers do find it difficult when lenders have attractive offers that appear on a Monday are withdrawn from the market by the following Friday. The time it takes to process an application can be frustrating particularly when it comes to dealing with local government bureaucracy, valuing a property and making sure that all the credit checks have taken place. The ability of a lender to get an offer out quickly in such a competitive property market is very important.
FR: What about the relationship between lenders and the private rental sector?
The private rental sector has come under great scrutiny and we shall see what impact the government's Renters' Rights Bill has when it goes through Parliament and becomes law next year. It is crucial to find the balance between landlord and tenant and there are great concerns that, with so many landlords selling up or switching to Airbnbs and holiday lets, the housing crisis will become even more acute. Lenders have a big role to play in supporting both professional portfolio landlords as well as those with just one or two properties.
FR: Finally, what advice would you give aspiring mortgage advisers?
In this challenging market what brokers need - to guide and help their clients - is knowledge, experience and education. Of course they must meet the requirements of the Consumer Duty regulations, but an encyclopaedic knowledge and understanding of all mortgage options in the market is vital. Take an holistic approach and get to know the lenders' BDMs well.
