Leeds Building Society saw its mortgage lending rise 37% annually to a record £2.6bn in the first half of the year.
Leeds Building Society said it also saw one of its busiest single days for mortgage completions in H1, which contributed to its record-breaking performance.
Speaking to Mortgage Solutions, chief executive Richard Fearon said he was delighted with the mutual’s performance as it broke records not just with lending but also the wider business.
Its membership reached a high of 945,300, while savings balances surged to a record £22.4bn.
As well as seeing its busiest day, the mutual witnessed its two busiest months in H1, which helped it to hit its record lending figure.
Fearon said the mutual’s reputation for supporting first-time buyers onto the housing ladder drove this performance. During the period, it helped 7,800 first-time buyers, up from 7,700 last year, and welcomed 17,500 new borrowers. This was an increase on 15,800 in 2023.
Arrears also stayed low at 0.69% of its book, compared to 0.68% a year ago, which the mutual said was a “testament to the hard work of its teams to support borrowers facing financial difficulty”.
The mutual reported a pre-tax profit of £50.5m, down from £116.2m a year ago. It attributed this to the simplification of its balance sheet and a one-off cost during the period. It had an underlying profit of £86.4m, up from £65.3m in the second half of last year.
Leeds BS finding its ‘sweet spot’
Fearon said its prioritisation of first-time buyers was “cutting through” and the mutual was showing it was “serious about it”.
Leeds Building Society exited the second homes market and piloted a halt on holiday let lending in North Norfolk District and North Yorkshire, two areas it identified as being impacted by the holiday let market.
This has been going well so far, Fearon said, and helped the lender “focus on areas we want to do even more on, such as shared ownership and our first-time buyer proposition”.
Fearon said Leeds Building Society’s reputation as a go-to lender for first-time buyers was “getting there”, but the mutual had “a lot more to do”.
“I’m really excited about some of the things we’ve got in the pipeline for the second half, we’re working hard on improving our proposition even more,” Fearon added.
The mutual has been adjusting its offering for first-time buyers, with a series of rate cuts made recently. Fearon said more reductions were coming next week.
“I think we’ve found a real sweet spot and that’s led to this record-breaking performance,” he added.
Leeds BS seeing a return on investment
Fearon said it had also been an “incredibly competitive market” in the first of the year.
When asked what made Leeds stand out compared to other lenders that had seen volumes decrease in H1, Fearon said the mutual had been investing in many areas.
He added: “If you look at the Moneyfacts’ figures, there’s more product availability today than there has been any time in the last 16 years. We’re very agile in terms of launching products. I think that’s really kept us ahead of the competition.”
“We’ve been investing in our digital footprint, we’ve invested in broker service and we’ve seen that come through in really strong broker satisfaction,” he added.
The mutual has also built on its mortgage hub and automated its rate switch process.
Fearon said: “What that means is now 94% of rate switches are just automated in the system, which has been really positive.
“We’ve had over 6,000 submissions and the broker feedback has been ‘it’s just made it so much more efficient’. They don’t need to get signatures anymore and that reduces the time for them. We continue to invest and support our broker partners and deliver great service.”
Leeds Building Society has further plans to make the process smoother for brokers, Fearon said, adding: “We would like to invest in our further advance proposition… we’ve got some huge investment plans in our whole core systems landscape.
“That’s all designed to make us easier to do business with and more of a pleasure to do business with.”
More confidence in the market
Fearon welcomed the government’s proposals to simplify the planning system and make housebuilding targets mandatory.
He said this work was “hugely helpful” but noted it would take years to have an impact, “as these things take time”.
The mutual has been lobbying the government to improve housing in the UK, with Fearon adding: “One of the issues is we’re not building enough homes in this country”.
Additionally, Fearon said he was “delighted [the government is] supportive of doubling the size of the mutual sector, we’ve seen the building society sector be really active and really successful. Ultimately, it’s the confidence to invest and grow, if [the government] can provide that stable platform and the confidence for business, then we will thrive.”
Looking ahead, Fearon said he envisioned continued strong performance for the rest of the year with more records broken.
With expectations for interest rates to fall and mortgage pricing already declining, “that will support affordability and support first-time buyers. I think there’s some real confidence that’s coming back into the market and I’m optimistic about the outlook”.
Leeds Building Society likes to “swim against the tide”, Fearon said, adding: “Big lenders are closing branches, I’m really excited about the fact we’re opening branches. People are getting rid of passbooks; we’re committed to passbooks.
“I like doing something different, there are niches out there, there are customers that need support, there are brokers that need support, and we want to be one of the lenders that support people in those niches.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
