West Bromwich Building Society hails record lending to first time buyers
West Bromwich Building Society has lent more money to first time homebuyers than at any other time in its history.
The UK’s seventh largest building society, with 37 branches spanning Birmingham, the Black Country, Shropshire and mid-Wales, saw lending to first time buyers rise to £265m in the year to the end of March, up from £167m the year before, the highest in its history.
Gross residential mortgage advances were also up, 18% to £837m compared to £712m.
The mutual also reported statutory and underlying profit before tax of £8.8m, reversing its statutory loss of £19.8m the year before.
The loss was down to a one-off cost of £27.5m it had to pay back to a group of landlords after losing a legal battle in a 2016 Court of Appeal case over the interest it charged around 6,700 buy-to let landlords.
Chief executive Jonathan Westhoff said: “This has been another satisfying year for the West Brom where we delivered on our stated purpose to support the financial wellbeing of our membership through the provision of mortgages and savings products.
“Although our reported profit shows a dramatic swing compared with the previous year, this position is distorted due to the one-off costs of reimbursing the interest charged on certain buy to let mortgages in 2016/17.
“It would therefore be more appropriate to measure our progress in terms of the underlying performance, which shows a 14% increase in profits. Pivotal to this success is our focus on lending to customers to support their plans for home ownership, which has grown for the fifth year in succession.
“We have responded to customer demand to assist first time buyers by increasing our maximum loan to value ratio to 95%. We also added a government-backed Help to Buy ISA account to our savings portfolio for those who want to buy their own home but still need time to raise a deposit. With the Society’s new lending to first time buyers now at record levels, our commitment to this market sector is clear to see.
“While the West Brom’s focus on helping borrowers and savers is very much in line with our mutual heritage, we have to recognise that we operate in a fast-changing retail environment. New technology and the drive to digitalisation must be firmly on our radar.
“This is a challenge we are already responding to so that our overall proposition continues to meet the needs of our members, both present and future”
