Offering the lowest fixed rate on the market, adopting a more common-sense approach to assessing mortgage applications, and a popular sideline as a DJ
Yorkshire has just launched a 1.14 per cent two-year fix. What was the thinking behind this record-low rate?
As a mutual, our customers are our number one priority and we are really proud to be offering them the lowest fixed rate on the market. We reinvest all our profits to enable us to offer competitive rates and choice across all our brands, so it made sense to ensure we were market-leading on this key rate.
Do you think two-year rates could go lower? If so, when and why?
There is a lot of uncertainty, in both the mortgage market and the wider economy, so it is difficult to predict where rates may go next. The lowest fixed-rate mortgage on record is last summer’s 1.05 per cent and rates are now less than 10 basis points higher than that, so it will be interesting to see what happens. However, we do not anticipate at this point a new record low.
As a general context, we are seeing a softening in demand in both the housing and the mortgage markets, with data from recent months indicating house-price growth has slowed and demand for mortgages lessened. It is likely this has been caused by a combination of factors, including landlords bringing forward house purchases in a rush to beat the stamp duty hike in April, as well as the economic uncertainty surrounding the EU referendum.
What is your outlook for mortgages for the rest of the year?
Although, in the long term, demand for property and mortgages is likely to grow as a consequence of demand outstripping supply, in the past, where similar events such as the Scottish referendum and the 2015 general election have triggered the initial drop in activity we are currently seeing, markets have normalised quickly in the subsequent months. However, the rapidity with which markets return to business as usual following the EU referendum could be dictated by the result, which could have a knock-on effect on sterling, the UK property market, swap rates and mortgage rates.
Borrowers may be tempted to lock in to fixed rates now, which are not far above the lowest on record, so they can be certain their monthly mortgage payment will be unaffected by external influences, whatever the outcome of the referendum.
What else can brokers expect from Yorkshire Building Society’s Accord in the months ahead?
Brokers are a key part of our business and of our growth strategy. We have taken on board their views by investing in our underwriting team and taking a more common-sense approach to assessing mortgage applications. As part of our ongoing commitment to improve service to advisers and their clients, we recently modified our affordability criteria, improving the chances of mortgage approvals. We have done this by adjusting our household expenditure estimates, which means we will be able to help a broader range of customers and offer some borrowers a larger loan.
The changes will enable us to take a more pragmatic view of borrower spending while continuing to ensure customers can comfortably afford their repayments. We are continuing to provide brokers and their clients with choice and long-term value.
If you were not in your current role, what would you like to be doing?
Probably lying on a beach in Ibiza being buried in sand by my kids while pretending to be asleep.
As a child, what was your dream job?
I think my dream job would have been a professional footballer.
Do you have any secret talents?
Back in the ’90s I used to DJ regularly in clubs and bars at weekends. I still have my turntables, mixer and a sizeable record collection in the spare room so I am happy to turn out the odd guest mix at friends’ house parties on request.
What is the best advice you have received?
Never take yourself too seriously.
Who is your all-time hero, and why?
I have no one I could describe as a hero. But I have much admiration for anyone who makes good in their chosen field from tough beginnings – such as DJ, musician and producer Goldie.
Year established: 1864
Yorkshire House, Yorkshire Drive
Bradford BD5 8LJ
Tel: 0345 1200 200
The Huddersfield Equitable Permanent Benefit Building Society was set up in 1864 by three men who met each morning from 5am to 8am in a single room in Huddersfield. Early directors of the society included a dentist, a shoemaker and a plumber. At the end of the first year there were six borrowers and assets of £4,044 13 shillings and 5 pence. Today, Yorkshire Building Society’s assets are worth around £33bn, with 3.5 million members.