The Business Exchange Bath & Somerset Issue 10: Winter 2018/19 | Page 12

FINANCE
Getting on the mortgage ladder
by Kevin Gray, Chief Executive of Bath Building Society
Kevin Gray, Chief Executive
of Bath Building Society
The Society’s trade body, the Building Societies Association, has recently
published an excellent report on intergenerational mortgages, which
has been part authored by my predecessor, Dick Jenkins.
The report points out that despite
Government schemes such as Help to
Buy, young people continue to struggle
to get onto the housing ladder and that
things would be a whole lot worse if
there was not also significant support
given by what is commonly called
The Bank of Mum and Dad (BOMAD).
Conservative industry estimates now
place the BOMAD alongside the largest
ten mortgage lenders in the UK.
Almost all Building Societies,
including Bath, believe that it is a
fundamental part of their distinctive
social purpose to help young
households into home ownership. In
the real world of increasing property
prices and a regulatory regime that
requires (in my opinion) rather daft
levels of stress testing of incomes
before mortgages can be assessed
as being affordable, it’s not always
easy for our sector to deliver on its
social purpose. Despite the fact that
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THE BUSINESS EXCHANGE 2018
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we continue to lend on the purchase
of second homes, holiday homes and
buy-to-let properties, I am proud to say
that over 50% of Bath Building Society’s
new lending is to first time buyers. I am
even more delighted by the fact that
the proportion of our lending that is
financing homes for first time buyers
is also increasing. Is Bath Building
Society living up to its social purpose?
Yes, I think it is. Is this good enough?
No, it’s not. Must we, and can we, do
better? Yes, on both accounts.
The majority of our young people
still aspire to home ownership, but they
are increasingly giving up on the dream
of ever becoming home owners. This
is occurring at a time when property
ownership is skewed heavily in favour
of the affluent and the old. The lack of
opportunity for younger people is now
seen by the general public as being
one of Britain’s biggest problems. The
sheer scale of the hurdles they face
in raising a deposit and passing the
affordability test, requires much more
to be done.
As we near the end of 2018, the
Society is busily making plans for next
year and beyond. We intend to keep
our social purpose very much in the
forefront of our strategic thinking.
Because we are very clear as to ‘why?’
we are in business, we are focussing
our energies on what we need to do
and how we need to do it. With a fair
wind and a little luck, we will be able
to change more people’s lives in 2019
by making their dreams of home
ownership a reality, all financed by
the collective power of our Members’
savings.
If you, a friend or a family member
aspires to home ownership, why not
contact us and see if we can assist.
Have a very happy and peaceful
Christmas and a prosperous 2019.
@BathBuildingSoc
05/10/2016 17:17