Latest figures from the Building Societies Association showed that 3.5 million households are currently being supported to buy a home with a mortgage from a building society.
A quarter of the UK’s outstanding residential mortgages are held by building societies, and the £11.7bn growth in those mortgage balances in the six months to September last year accounted for 72% of total mortgage market growth.
These figures demonstrate that, 250 years after their inception, building societies continue to play a vital role in the sector, offering an important alternative to buyers, including those who thought they’d never get a foot on the ladder.
We can do this because we adopt a flexible, case by case, approach.
Cases can be manually underwritten and take people’s individual life stories into account in a way that doesn’t require them to tick specific boxes.
However, the difficulty with this more tailored approach is articulating exactly who you help and how.
In an increasingly complex lending landscape, it can be tricky for brokers to find the best option for their clients.
Many lenders want to cater for every possible scenario, but when you’re trying to be all things to all people, it’s hard to stand out for anything.
This is especially true in the building society sector, where criteria can be incredibly nuanced and varied from lender to lender.
Without that clarity, it’s more complicated for brokers to identify the right lender for each case, particularly when there are ‘quirks’ – and let’s face it, these days there are almost always quirks.
Four key areas of lending
Over the past 12 months, we’ve listened to brokers about the key challenges their clients are facing, we’ve monitored industry trends and analysed our own data.
We used all this information to make sure our mortgages address the difficulties homebuyers and homemovers are facing today.
The review included changing criteria, reducing fees, launching new products and entering new areas of lending.
The final stage has been to simplify our proposition into four key areas of lending. And while we offer a broader range of mortgages, these four core areas reflect the solutions we offer to the most common challenges faced by borrowers today.
First-time buyers
Affordability and deposit constraints remain significant barriers to homeownership.
With increasing costs and changing tax regulations, first-time buyers need more support than ever.
By offering solutions which tackle those constraints, such as 95% loan-to-value (LTV) mortgages, Joint Borrower Sole Proprietor (JBSP) and Deposit Lite, and being more flexible with gifted deposits, non-standard income and impaired credit scenarios, we are opening doors for more people.
Non-standard income
Employment patterns have shifted dramatically, with more people relying on multiple income streams, self-employment, or less traditional work arrangements.
Rigid criteria modelling can exclude creditworthy borrowers who simply don’t fit into standard lending models.
This is where offering a more flexible income solution to support those with second jobs, side businesses, contract work, or fluctuating earnings can make a real difference
Credit revive
Economic pressures have led to an increase in borrowers with impaired credit histories. Over the last year, we have seen an increase in applications for impaired credit, for example, and debt consolidation is the most common reason for remortgage capital raising.
A potential buyer could be financially stable apart from one minor historic credit blip. By adopting a common sense and customised approach, cases can be assessed on their merits, even when they don’t fit a specific mould.
Credit restore
Beyond providing access to lending, some borrowers need structured solutions that actively help them rebuild their credit profile.
Whether due to a past financial setback or a major life event such as bereavement or marriage breakdown, the demand for products that help borrowers rebuild their financial health is growing.
Placing cases quickly and confidently – the ‘Bucks Way’
Building societies continue to play a vital role in supporting homebuyers, particularly those with unique financial circumstances.
Our approach highlights the importance of flexible, tailored lending solutions – from assisting first-time buyers with affordability challenges to accommodating non-standard incomes and helping clients rebuild credit.
For brokers, understanding and leveraging these bespoke lending options can create more pathways to homeownership for clients who may struggle to meet traditional high-street lending criteria.
Working with a lender that has a well-defined proposition can simplify the process of placing cases quickly and confidently. It eliminates guesswork and provides reassurance that the lender is genuinely aligned with a client’s needs.
We want brokers to know they don’t always need a specialist lender for specialist cases, but they do need a lender that knows what it’s good at.
Claire Askham is head of mortgage sales at Buckinghamshire Building Society
