West Brom lending more to first time buyers
The Black Country's biggest building society has lent more money to first time buyers than at any time in its history, it revealed today.
The West Bromwich Building Society lent £265 million to nearly 2, 000 first time buyers in the 12 months to the end of March – £100 million more than the year before.
It was the strongest year for new mortage lending at the society since the financial crisis drove it out of the market. It returned to lending in earnest in 2012 and last year gross residential mortgage advances were up 18 per cent to £837m.
And maximum loans are now back up to 95 per cent for the first time since the credit crunch that nearly swept the West Brom away in in 2009.
Profits are up too. Statutory and underlying profit before tax hit £8.8 million. That's 14 per cent up on the underlying performance last year and reverses 2017's statutory loss of £19.8m.
That loss was due to a one off hit of 27.5m after it lost a 2016 Court of Appeal case over the interest it charged around 6,700 buy-to-let landlords.
Nearly 170 years old and the biggest building society in the area, the West Brom has 37 branches across the Black Country, Birmingham, Shropshire and mid-Wales; approximately 434,000 members; and 700 employees at its headquarters and branch network.
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 per cent 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 per cent. 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.
"For savers, there has finally been some welcome relief from the low interest rate environment of recent years. We were pleased to be able to pass on benefits from the Bank of England’s decision to finally raise Bank Rate and there is a prevailing sense that further increases are to be expected as the economy stabilises."
The society has also seen a strengthening in its core capital – a key measure since its near collapse nine years ago – and has cut its legacy commercial loan book by 17 per cent to less than £500 million.
