Welcome to the Spring 2024 Hi Society Bulletin

In this bulletin, you’ll find an update from Gary Brebner on the recent activities at your Society, information on our partnership with Smart Money People and the latest news and events.

The post Hi Society Bulletin Spring 2024 appeared first on The Loughborough Building Society.

This special exhibition will feature fascinating displays that cover the 50-year history of the council.

This exhibition will be on display at Loughborough Library from May 9^th until July 27^th 2024, and it is free entry during the Library’s staffed hours.

For information on Loughborough Library including its opening hours visit: https://www.leicestershire.gov.uk/leisure-and-community/libraries/find-a-library/loughborough-library

The post Charnwood Borough Council 50th Anniversary Exhibition appeared first on The Loughborough Building Society.

Building a detailed client profile is an important part of the mortgage process. The more information the lender has, the more successful and straightforward the application will be. This is especially true when it comes to referring clients with a history of adverse credit, where soft facts are just as important as hard facts in determining the client’s borrowing needs.

A good referral should always include as much information as possible as this gives the lender greater insight into the circumstances surrounding the client’s credit profile. This is particularly important in situations where the client has built up a significant level of debt, taken out an IVA or debt management plan.

Supplying as much detail as possible at the outset will also help to prevent delays to the application process and avoid a series of back-and-forth emails and phone calls between the underwriter and the mortgage broker.

We often receive referrals from brokers where a client with a history of adverse credit is looking to secure a mortgage. The best referrals include soft facts that help to bring the client’s story to life and highlight how their circumstances have changed over time rather than solely focusing on the financial details.

A good example of the level of detail required was evident in a recent case where a husband and wife were looking to purchase a new property following the completion of an IVA.

The clients had £42,700.00 in unsecured debt and had entered an IVA in 2018 after the husband was made redundant after three years with his employer and only received a small pay out. Since then, all the payments under the IVA and the mortgage held on their existing property were fully maintained.

The clients had also taken out a credit card to rebuild their credit profile and were seeking to increase their borrowing amount from £90,000 to £150,000 to purchase a new home.

Although all the basic facts and figures regarding the client’s finances were included, very little information regarding the finer details of the clients’ situation before, during or after the IVA was taken out, were supplied.

For example, although it was clear that the client was made redundant, there was no information about whether the applicant found another job. This information is crucial.

Similarly, as it’s a joint application, the client’s wife’s employment history details should also be included and if she wasn’t employed, then an explanation for this is also needed. 

Including details such as the fact that the client was earning over £50,000 in his role before being made redundant is important in helping the lender understand the circumstances that led to the IVA, particularly as he was then unemployed for four months before securing a position paying £25,000.

While this helped to cover the mortgage payments on their existing property, the couple continued to struggle financially, prompting the wife to return to work on a part-time basis while also caring for two small children.

Delving into the reason behind the debt is crucial as it helps to eliminate lender concerns about the clients’ propensity towards debt.

One of the main reasons for the high level of debt was due to a £25,000 loan to cover the cost of a new kitchen, while credit cards were used to pay for Christmas, holidays and emergency expenses.

Although the applicants admitted to overspending in the years prior to taking out the IVA, the significant drop in income coupled with the wife staying home to look after young children severely impacted their finances.

However, five years after taking out the IVA, the couple were both working full-time and earning a combined salary of £53,000 per year. They have also been saving to buy a larger property as they need more space now that their children are older and in full time education.

Providing a detailed account of their story in the five years since taking out the IVA helps to create a clear and concise picture of the clients’ financial background. It also helps the lender understand why they are applying for a bigger mortgage.

Whilst this is a complex set of scenarios, it does help outline how speaking to a specialist lender about what information is required when referring clients with a history of adverse credit can help brokers achieve a more streamlined application process and enable them to service the needs of their clients quickly and more effectively.

The post Soft facts as relevant as hard facts in specialist lending cases appeared first on The Loughborough Building Society.

Rumours that Chancellor Jeremy Hunt planned to introduce a 99% LTV mortgage designed to help first-time buyers (FTBs) get a foot on the property ladder in the Spring Budget dominated headlines last month.

While the finer details of the supposed government-backed policy were rather scant, the news sparked a significant level of debate and criticism among commentators over its legitimacy but the idea was scrapped as quickly as it had apparently been conceived.

One of the major objections to the proposed scheme was that having a smaller deposit risked leaving buyers in negative equity if house prices were to drop significantly in the future.

Another concern was that, although it would ease the pressure on FTBs when saving for a deposit, it would not make the cost of buying a property any more affordable, especially in the higher interest rate environment.

Given the fact that the concept of a 99% mortgage was not too far removed from a product that already exists in the market – the 100% mortgage – the furore and attention surrounding the proposed scheme came as somewhat of a surprise.

Alongside many other lenders, we have been offering 100% mortgage products for quite some time, therefore, a government-backed 99% mortgage product did not seem such an unusual concept.

While it is certainly true that 100% mortgages have come under a fair amount of criticism over the years, this type of lending solution can offer a perfectly viable alternative for those borrowers who are looking to get onto the property ladder but are struggling to raise a deposit.

There are many different variations of this type of mortgage in the market today and understanding what they are and how they work is important when addressing the needs of a variety of clients.

For example, here at The Loughborough, we have a suite of family assist mortgage solutions including a family deposit product which enables the borrower to take out a 100% LTV mortgage and have another family member (typically parents) guarantee a deposit of up to 20% of the purchase price.

This can be done by placing a collateral charge against the depositor’s own property or as a cash lump sum into a savings account offering a 3% interest rate. In both scenarios, the deposit is released after seven years, or sooner if there is enough equity in the property when it is time to remortgage.

This can prove to be an attractive solution for parents and family members in the current higher interest rate environment where gifting a deposit may no longer be financially viable. Instead, a family assist mortgage not only means they will get their money back; they will also earn interest on their money while still helping their child buy a house.

A similar proposition is available through our Joint Borrower Sole Proprietor (JBSP) Deposit Guarantee product which enables a family member to provide a 20% security against their house or as cash held in a deposit guarantee account, while also boosting the applicant’s borrowing capacity by using family members’ income for affordability purposes.

Again, in most cases, this tends to be the borrower’s parents, but other family members such as grandparents, siblings and aunts and uncles can also be listed on the application, although the property will only be legally owned by the occupier.

As with all forms of borrowing, there will always be an element of risk involved and family members should ensure they seek legal advice to understand what would happen if the borrower failed to keep up with mortgage payments.

Given the level of complexity involved in these applications, it is important to note that each one is individually assessed and underwritten to ensure maximum affordability for the client. This also enables brokers to get answers to any questions they may have regarding the application process.

Not only does this help to provide surety of service and outcome, it also allows brokers to help their clients explore every avenue of getting on the property ladder and achieve their homeownership aspirations in an innovative yet responsible manner.

The post Why reading beyond the headlines is crucial for 100% mortgages appeared first on The Loughborough Building Society.

The retirement landscape in the UK is undergoing significant change.

People are living and working longer than ever before, with socioeconomic factors such as the average age at which many people now buy a house and have children all playing a major role in this shifting dynamic.

Rising house prices over the last few decades have seen the average age of first-time buyers increase to 34 years old, according to the Office for National Statistics (ONS), with the knock-on effect being that many people are entering their 50s, 60s and 70s still carrying mortgage debt. 

Similarly, a growing number of the population are choosing to start a family later in life, which means many people are now entering what has traditionally been considered their retirement years with ongoing family commitments such as childcare fees. 

This is having a major impact on how consumers plan for, and live through, their retirement years, with the days of working for several decades and retiring at the age of 60 a thing of the past for many. Similarly, advancements in science mean people are now living longer, healthier lives and spending a greater amount of time in retirement and in the workforce.

Yet despite these shifting social dynamics, the mortgage market has been slow to respond to the changing needs of this demographic, with many product offerings failing to take into account the increasing demand for solutions that cater for these changing needs. 

Adapting to the times 

This is particularly true for those borrowers in their pre-retirement years, who, despite being healthy and able to work, face difficulty trying to secure a mortgage after the age of 55.

In many of these cases, these borrowers have been declined a mortgage on the high street due to their age. 

However, we continue to experience growing demand for this type of borrowing, with some of these individuals looking to downsize to a smaller property, while others still want or need to continue working to finance their mortgage, lifestyle and family commitments.

As our lending criteria have no upper age limit, these clients have been successful in securing an interest-only mortgage, as this option can be taken out for up to 35 years regardless of the client’s age at the time of application.

For example, this means that pre-retirees looking to downsize can use the sale of their property to secure an interest-only mortgage with a maximum loan to value (LTV) of 60 per cent, provided they have a minimum amount of equity in the mortgaged property. This ranges from £500,000 in London and £350,000 in the South East and South West to £225,000 in the Midlands and Wales and £200,000 in the North.

There is also the opportunity to combine this with a capital repayment option of up to 80 per cent LTV, subject to the client meeting the minimum equity requirements. In this case, the 60 per cent LTV limit will still apply on the interest-only part of the loan.

Income multiples of up to five-and-a-half times income and loan amounts of up to £750,000 are also available on interest-only mortgages, enabling borrowers to tap into a substantial amount of equity that may have been built up in the property over the longer term. 

In cases where the property is the applicant’s main residential home, interest-only is available up to 75 per cent LTV, with any lending above this limit available on a capital and interest repayment basis only.

If the client does not have enough equity in the property, they can use a percentage of their pension fund – for example, 25 per cent of a £300,000 pension fund (£75,000) – as a repayment vehicle, enabling them to take out an interest-only mortgage of up to £75,000. 

All these options demonstrate the growing flexibility required to support this growing demographic who, though approaching the traditional age of retirement, are not in a position to leave the workforce, remain undecided about the future or want to continue working for the foreseeable future.

And being aware of these options could result in more clients being able to continue working towards their retirement goals while simultaneously earning an income that will help to boost their retirement fund when they are ready to leave the workforce. 

The post Interest-only options for pre-retirees appeared first on The Loughborough Building Society.

We strive to provide products and services that best suit our member’s needs, to deliver the best customer experience and to ensure that the information that we present is clear and supports our members to help make informed decisions.

If you’ve recently visited a branch or contacted us, we’d love to hear about your experience, you may be asked if you’d be happy to leave us a review when receiving information through the post from us.

You can leave us a review on Smart Money People’s website (see link below), where you’ll find a dedicated page for The Loughborough Building Society.

Your feedback will be invaluable to us in making your Society even better for you, and that we’re providing an excellent experience to you, our members.

The post Loughborough Building Society partners with Smart Money People appeared first on The Loughborough Building Society.

This facility will be available on loans up to 80% LTV across The Loughborough’s residential product range for purchase or remortgage purposes on the applicants main residence. It is applicable for those applicants who have previously been employed in the same line of work as their new business and is also available for newly qualified professionals with one year’s worth of accounts.

A year two projection may be considered on referral where the business has been trading for a minimum of 18 months and the projection has been prepared by a qualified accountant.

Each case will be assessed on an individual basis.

Ashley Pearson, Head of Intermediaries at Loughborough Building Society, commented:

“Securing a suitable mortgage continues to prove that bit more challenging for many self-employed people across the UK, with this demographic often falling foul of one-size-fits-all mainstream lending criteria.

“For brokers with self-employed clients, it’s never been more important to understand the breadth of available options and in recognising the flexibility of certain lenders when looking to place this type of business, even for those relatively new business ventures.

“We hope this positive criteria enhancement will help open up more avenues for this vital component within the UK workforce to access the type of mortgage product they need and deserve.”

The post Loughborough Building Society enhances self-employed criteria appeared first on The Loughborough Building Society.

The challenges facing first-time-buyers (FTBs) have been well documented over the years, with rising rents, limited housing stock, stagnant wages and the cost-of-living crisis placing additional pressure on the disposable income of many would-be buyers.

Most recently, these challenges have been further exacerbated by the higher interest rate environment and widespread economic uncertainty that has gripped the UK, all of which have combined to make saving for a deposit even harder than before.

It’s not just FTBs who have been feeling the pinch. Second steppers, buy-to-let (BTL) landlords and many of those approaching retirement age have also felt the impact of increased living costs, some of whom have seen their borrowing capacity reduced as they struggle to overcome affordability barriers. 

Against this backdrop, the number of borrowers turning to family members to help them get onto the property ladder has increased. In fact, research carried out by Legal & General shows the Bank of Family was expected to provide support for almost half (47%) of house purchasers under the age of 55 in 2023 alone.

However, given the recent economic challenges faced by all homeowners, gifting deposits and financial contributions may no longer be a viable option for many. In which case, a concessionary purchase mortgage could prove a suitable alternative by allowing family members to sell their home to another family member at a rate which is below market value.

In the majority of cases, lenders offering concessionary purchase mortgages will allow the sale of a property at a discounted price with no deposit, provided it is between family members. In some cases, this can also include step parents.

Concessionary purchases between family members means that applicants can use the equity within the property being sold to fund the deposit, which helps to make the purchase more affordable by reducing the overall price.

Some lenders, such as The Loughborough Building Society will also consider applications where the parents may want to sell their residential property to their son or daughter but would like to continue living in the property under a family BTL mortgage.

This can prove to be a useful solution for borrowers approaching retirement age who may have seen their disposable income significantly reduce as a result of increased living costs and can no longer continue with their mortgage.

In this case, a concessionary purchase of the property can be made by the owner’s son or daughter provided they are homeowners themselves and earn a minimum of £25,000 a year. Under these circumstances, seeking independent legal and tax advice is recommended as there could be some inheritance tax implications.

Concessionary mortgages can also be used by landlords looking to offload a property before the end of the current tax year by selling it to an existing tenant. This can prove to be a good arrangement for any FTB renting a property in an area they like, as it could provide them with a viable solution to get on the property ladder.

It can also help the landlord avoid the time and effort involved in putting the property on the market, as well as potentially saving them thousands of pounds in estate agency fees by carrying out a private sale.

In this scenario, the landlord is able to contribute to the deposit by offering a reduction on the price of the property as an equity gift, however, the applicant would also be required to put down a 5% deposit to secure the sale.

The mortgage rates and terms offered on a concessionary mortgage are usually similar to a standard mortgage, but it’s important to note that not all lenders offer them. Advisers with clients who may be interested in the concessionary purchase option should always ensure they engage with lenders who are experienced in such a transaction and have the capacity and capability to underwrite this type of mortgage application.  And for those borrowers who may not realise that this may be an option, this is an area in which well-informed advisers can really shine. 

The post Understanding concessionary mortgage purchases appeared first on The Loughborough Building Society.

Welcome to the Winter 2023/24 edition of your member magazine.

In this edition of your magazine, you’ll find Gary Brebner’s summary of our annual results for 2022/23, information on the developments across the year, and the latest news and events

The post Hi Society Winter 2023/2024 appeared first on The Loughborough Building Society.

Every January, the new year ushers in the chance for change, the opportunity to start afresh and set good intentions for the year ahead. For some, this may mean improving their exercise regime and their diet, while for others, it might involve moving house, changing jobs or getting their finances in order.

The last few years have proven to be extremely challenging for many UK households, with the cost of living crisis placing significant financial pressure on disposable incomes, causing some to run up debt, tap into savings or put their home improvement plans on hold as they wait for greater economy certainty.

However, as we begin 2024, the economic outlook does seem a little brighter and, as a result, the early months of the year may be the time for homeowners to consider their remortgaging options as they evaluate ways to manage monthly mortgage payments, start a home improvement project or pay off debt.

Aside from naturally coming to the end of their current deal, there are a number of reasons why a borrower may seek to remortgage with another lender, including for debt consolidation purposes, to capital raise or because of a change in their personal circumstances.

For example, those going through a divorce may find they need to remortgage and conduct a transfer of ownership during the settlement process in order to gain full ownership of a property. In this case, LTVs of up to 90% are offered by some lenders, providing borrowers with greater scope for achieving a clean break during a challenging and emotional time.

Most recently, easing inflation and a less volatile interest rate environment means now may be a good time for homeowners, who may have been holding off, to act as competition amongst lenders begins to heat up across the remortgage market.

Remortgaging can also prove to be a useful tool for raising capital as it allows homeowners to tap into any equity built up in their home by using this to consolidate and pay off any debt that may have accumulated or to carry out a home renovation project.

For example, Loughborough Building Society allows remortgages for home improvement purposes up to 95% LTV, provided details of any planned works at the higher LTV band are clearly outlined during the application process. For debt consolidation purposes, mortgages of up to 80% LTV are available, including for those people with a high debt to income ratio.

This means that someone earning £50,000 a year with a further £50,000 in unsecured debt may also qualify for a mortgage, provided there is proof that they are regularly servicing the debt. This can be done on an interest-only basis and on a term of up to 40 years.

Another example where remortgaging may prove a viable solution is for those Help to Buy clients who have taken out a five-year equity loan to get onto the property ladder and are now coming to the end of the interest free period in a higher interest environment.

Exploring their remortgaging options and raising capital to repay the loan and buy the property outright may make more financial sense in the current climate and mortgages of up to 90% LTV are available to help the borrower achieve their goals and take full ownership of the property.

Of course, brokers will always need to ensure that any fees or charges associated with leaving a mortgage early are factored into the advice process to ensure they are securing the best outcome for their clients. And, while remortgaging may not be a suitable solution for every client, the flexibility it offers means it should always be front of mind when advising clients throughout what could prove to be a busy year for this particular sector.

The post Flexibility through remortgaging appeared first on The Loughborough Building Society.

The Savings Champion awards are the only awards that focus solely on savings, with these awards celebrating the providers that are driving competition and helping savers earn as much as possible from their cash.

We’re proud to announce that the Society won the award for Best Notice Cash ISA provider.

Many thanks to our dedicated Branch and Savings teams for all their hard work throughout the year.

“I’m extremely proud of our team and approach to consistently reviewing our savings products to ensure they remain both competitive and straightforward in design. To be shortlisted for two categories with so many savings providers and products in the market is a real achievement, and to win best Notice Cash ISA Provider is fantastic! Thank you to The Savings Champion for the recognition.”  Tracy Blake, Head of Branches and Savings at The Loughborough.

Congratulations to all the winners and finalists.

For more information on our savings products including our Notice Cash ISAs visit www.theloughborough.co.uk/savings

The post Loughborough Building Society awarded Best Notice Cash ISA Provider at the 2024 Savings Champion Awards appeared first on The Loughborough Building Society.

The last few years have proven to be somewhat challenging for many UK consumers, with rising living costs, soaring inflation and ongoing uncertainty presenting a significant number of challenges for many mortgage borrowers.

In the buy-to-let (BTL) sector, this has been further exacerbated by unfavourable tax changes such as the withdrawal of mortgage tax relief, the stamp duty land tax reform, a variety of increased regulatory demands, all of which have placed a squeeze on the profit margins of landlords.

For many smaller and accidental landlords, the combined impact of all these changes has been significant, with many finding themselves stuck with nowhere to go or having to move onto a less attractive product transfer deal.

Yet, as the end of another year rapidly approaches, there are signs that the UK economy is beginning to show signs of recovery. Inflation has fallen to its lowest level in two years, reaching 4.6% in October and the Bank of England base rate has remained steady at 5.25% since August following 14 consecutive hikes since December 2021.

This will come as welcome news for many BTL borrowers, particularly those who have seen their finances stretched and profit margins squeezed over the last few years and as such, will seek ways to reduce their costs and boost their borrowing power by seeking out the lowest rates when their current deal expires.

However, while it’s certainly true that interest rates are beginning to see a downward spiral, it’s important that any broker looking to address the needs of their BTL clients look beyond the headline rate when assessing affordability to ensure the product offers the best possible outcome for their clients’ needs.

For example, a broker may find that, in some cases, a lower rate mortgage product actually comes with a higher fee – even as much as 7% to 8% of the overall loan value – therefore making the cost of borrowing significantly more than if a client took out a product with a slightly higher interest rate. In comparison, a product with a slightly higher rate may have a lower fee and work out to be more cost effective over the term of the mortgage and save the client money.

Assessing the way in which lenders calculate affordability can also make a difference to the borrowing capacity of some BTL landlords, with features such as top-slicing proving a useful tool in maximising affordability among borrowers. Approaches to the offering of such a facility will also differ from lender to lender. Here at The Loughborough, we top-slice at 90% of a borrower’s disposable income, which can make a significant difference in those situations where a landlord’s rental income fails to sufficiently cover the BTL mortgage interest repayments. 

For example, a client with a net monthly income of £3,000 and a net disposable income of £1,002.70 after all mortgage payments, loans and essential expenditure costs are factored in, can use 90% of their disposable income towards the rental coverage, the equivalent of £902.43.

This can provide a substantial boost to their affordability, particularly when compared to a product where top-slicing occurs at 60%, as it can increase the client’s borrowing capacity and help them secure a more cost-effective deal for their needs.

Of course, there will always be situations where a lower rate higher fee product may better suit the needs of a client, in which case, recommending the product will be best advice. However, for any broker with a BTL client looking to secure a mortgage, looking beyond the headline rate and taking a broader look at how the true cost of a BTL product is calculated is an important consideration when determining the best and most affordable deal for their needs. 

The post Assessing the true cost behind the BTL rate appeared first on The Loughborough Building Society.

With some people feeling a bit lonely in the local community, especially in the winter months, Anstey resident Elizabeth decided to set up a lunch club so residents can chat to others with a hot meal once a week.

As Elizabeth holds the Lunch Club’s savings account with the Society, she regularly visits our branch and speaks to our team at Anstey.

For some, Christmas is one of the loneliest times of the year, and with the festive season just around the corner, our Branch Manager Katie decided to help Elizabeth and the Lunch Club put together a Christmas meal for their community.

To raise funds for the Christmas meal, Anstey put on a raffle in the branch.

The local Tesco at Beaumont Leys and their community champion kindly donated 2 prizes to the raffle and the Anstey team donated 12 chocolate Reindeers.

With help from our members and the local Anstey community, the branch was able to raise a fantastic £117 pounds.

This donation will not only help the Lunch Club provide a full Christmas meal to its members, but it will also pay for crackers, napkins and small gifts for each member.

With help from the Loughborough, members of the Lunch Club, will be able to enjoy a Christmas meal with others this year.

The post Anstey Lunch Club – Christmas Meal Raffle appeared first on The Loughborough Building Society.

Loughborough Building Society has announced the promotion of Ashley Pearson from National BDM to the newly created position of Head of Intermediaries.

Ashley has over 20 years’ experience operating in financial services, predominantly working within the building society sector. He joined The Loughborough in 2017 as a BDM and, over the course of the past six years, he has been integral in building the Society’s intermediary proposition.

In his new role as Head of Intermediaries, he will join the senior management team and be responsible for all intermediary related activity and strategic planning. Within this, he will continue to manage a team of telephone BDM’s and drive further positive development throughout the broker and customer journey from a service and IT perspective.

He starts his new role with immediate effect.

Gary Brebner, CEO at Loughborough Building Society commented:

“Ashley has been a real driving force since the launch of our intermediary proposition and, alongside other key individuals, has helped to create some solid foundations on which we are looking to build. His market knowledge and relationships throughout the intermediary channels are second to none and we look forward to him and his team putting into practice the ambitious growth plans we have in place to further extend our lending reach in 2024 and beyond.”

The post Loughborough Building Society promotes Ashley Pearson to Head of Intermediaries appeared first on The Loughborough Building Society.

Following intermediary feedback, the Society will now accept newly qualified professional applicants who were previously in education/vocational training, who have not completed six months in the role, or have a contract of employment to start in the next three months. This applies across all product types, up to 95% loan-to-value.

Loughborough Building Society has categorised these newly qualified professionals as a medical doctor, medical consultant/surgeon, anaesthetist, optometrist, solicitor, barrister, dentist, veterinarian, pilot and accountant.

In another significant positive criteria change, the Society will now also accept between 50% and 100% of benefits income received, providing this income does not exceed more than half of the applicants total income and this can be evidenced through a confirmation letter and bank statements. Each case will be assessed on an individual basis and this change is applicable across its entire product range.   

Ashley Pearson, National BDM at The Loughborough said:

“Affordability, accessibility and availability are all ongoing issues for a number of borrowers in what remains a challenging period for the economy and the UK housing market. Therefore, it’s up to lenders to help break down some of these barriers of entry where possible, in a responsible manner.

“These criteria changes, which have been incorporated directly on the back of feedback from our intermediary partners, will help open more doors to credit-worthy borrowers from different professional backgrounds and with different income sources. And we are hopeful that they will prove popular among the target demographic.”

The post Loughborough Building Society implements criteria enhancements appeared first on The Loughborough Building Society.

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Ever since the first building society was established in Birmingham in 1775, these institutions have held a special place in the local community. Initially conceived with the sole purpose of building houses for its members, many of the earlier building societies were often disbanded when each member had built a house.

Today, almost 250 years after the first building society was originally conceived, they are not only a key provider of mortgages and savings products in the local community and beyond but also in supporting regional initiatives which help to drive the local economy.

In the current economic climate, the personalised approach adopted by building societies and the investment taken in the social and economic well-being of local economies can’t be ignored and although the number of building societies in the UK has reduced greatly over the years, their role remains as relevant as ever.

The personal touch

When it comes to their influence in the current mortgage market, building societies are helping intermediaries and their clients to navigate ongoing uncertainty by offering a personal touch to mortgage applications and in providing a range of specialist mortgage solutions which can meet the ever-changing needs of the modern-day consumer.

Whether this means looking at solutions that draw on family support such as a family deposit mortgage or using the income from parents or family members for a Joint Borrower Sole Proprietor mortgage to help boost borrowing capacity, speaking to us directly will enable advisers to determine the best solution for their clients.

In addition to this personalised service, the fact that every building society is fully owned by its members means there is no obligation to pay out dividends to shareholders and every business decision made is always with their best interests in mind.

This means that all profits can be directly invested back into the business in the form of higher interest rates for savers, lower rates for borrowers and through the provision of better overall services within the business or in the wider local community.

For example, many building societies have a strong commitment to regional investment that extends far beyond financial services and are actively involved in initiatives that contribute to the development of the local economy.

This can include providing support to local charities, the provision of financial education programmes in schools and the sponsorship of community events such as festivals or the local football team.

Building a community

Most building societies also regularly take part in community engagement programmes to better understand the needs and priorities of local residents or have employee volunteer or grant and awards programmes in place that provide support to local start-ups or environmental initiatives taking place within their communities.

On 1 November, five Leicestershire-based building societies, including The Loughborough, came together to outline the different and complimentary products available through intermediaries to borrowers, as well as outlining the services we provide to the local community.

The event, held at the Leicestershire County Cricket Club, provided local advisers with the opportunity to better understand how building societies’ function, how they continue to play a vital role in the UK’s financial services landscape and why utilising the services available on their doorstep can help benefit their clients and the wider community as a whole.

Whilst we all maintain our individual approaches to this, we also have a common goal when it comes to providing specialist lending solutions which can make a real difference for a range of borrowers in what remains a challenging economic environment. In short, it’s a real demonstration of mutuality and collaboration working in practice to champion a localised approach with a much bigger goal in mind.

The post How the mutual model can navigate the mortgage maze appeared first on The Loughborough Building Society.

Leicestershire Victoria County History Trust: 2023 Newsletter

The post Leicestershire Victoria County History Trust: 2023 Newsletter appeared first on The Loughborough Building Society.

The subject of a 100% mortgage tends to generate some heated debate, which is only natural given its somewhat chequered history. A fact which was certainly evident when Skipton Building Society launched the first-of-its-kind 100% mortgage product aimed at renters in May this year.

While some welcomed the move as a much-needed innovative solution to help address the specific needs of renters and first-time buyers (FTBs) looking to get a foot on the property ladder, the reception from others was a tad lukewarm to say the least. However, it remains important to remember that there is often more to this type of mortgage than meets the eye. After all, this 100% figure can be achieved in many different ways, from many different sources.

Helping to debunk the myths surrounding the product and keeping up to date with market developments, is where brokers play an increasingly crucial role in helping to educate FTBs and other borrowers struggling to raise a deposit about the many different variations of the product that exist in the market today.

For example, Loughborough Building Society has a suite of family assist mortgage products which includes a family deposit mortgage that allows a borrower to take out a 100% LTV mortgage product and have another family member (typically parents) guarantee a deposit of up to 20% of the purchase price.

This can be done by placing a collateral charge against the depositor’s own property or as a cash lump sum into a savings account offering a 3% interest rate, both of which are released after seven years or sooner if there is enough equity in the property when it’s time to remortgage.

In the current market, this could prove to be a viable alternative for parents and family members gifting a deposit as not only will they get their money back; they’ll earn interest on their money and still help their child buy a house. This represents an attractive proposition considering recent figures from L&G which highlighted that the average amount of money gifted by family members is expected to reach £25,600 this year.

This type of mortgage is also available through our Joint Borrower Sole Proprietor (JBSP) Deposit Guarantee product which enables a family member to provide a 20% security against their house or as cash held in a 3% deposit guarantee account, while also boosting the applicant’s borrowing capacity by using family members’ income for affordability purposes.

In most cases, this will be the borrower’s parents, but other family members such as grandparents, siblings and aunts and uncles can also be listed on the application, although the property will only be legally owned by the occupier.

The post Debunking the 100% mortgage myth appeared first on The Loughborough Building Society.

Welcome to the Autumn 2023 Hi Society Bulletin

Rather than just have two newsletters a year and based on member feedback, we’ve introduced this shorter interim update, the Hi Society Bulletin.

In this bulletin, you’ll find an update from Gary Brebner on the latest activities at your Society and information on our websites Cost of Living support pages. 

The post Hi Society Bulletin Autumn 2023 appeared first on The Loughborough Building Society.