Genworth has claimed that building societies are continuing to outshine their larger banking rivals’ in the first-time buyer market.

The mortgage insurance provider said that, following on from Monmouthshire Building Society before it, the Hanley is the latest mutual to not only marry strong lending figures with wider industry recognition, but to partly attribute this uptick to the incorporation of mortgage insurance into a prudent lending framework.

Over the past 12 months the mutual grew its gross lending by 14% and lending to first-time buyers by 17%.

Simon Crone, vice-president commercial – mortgage insurance Europe at Genworth said that while recent proclamations that first-time buyer activity levels have hit five-year highs have been tempered somewhat by the fact transaction numbers are still historically modest, he believes Hanley’s success is proof of how much a difference mortgage insurance can make to helping potential homeowners realise their aspirations.

“These figures would be impressive enough in any climate, but are afforded extra import by the subdued appetite of the big banks to lend, particularly to new borrowers,” Crone said.

“The mortgage market – and lending to first-time buyers in particular – does seem to be undergoing something of a gradual recovery at present, but the battle is not won yet and there still needs to be a greater supply of home loans offering higher loan to values. Building societies have been quick to recognise and address this need without compromising their attitude to risk. Utilising mortgage insurance for their higher LTV mortgage offerings has certainly enabled them to steal a march on some of the larger lenders.

“No one is suggesting lenders return to the sort of reckless practices that saw mortgages offered at 100% of the property’s value and beyond, but 90% and 95% home loans are vital if first-time buyer activity is to continue to track upwards. Now the property market has started to pick up, deposit requirements will only become more onerous, so it is imperative that lenders keep pace with this and offer mortgages that reflect the situation.

“Mortgage insurance is one way they satisfy this demand without having to expose themselves to increased risk and the Hanley is just one lender that has acknowledged the important part it can play and the wide range of borrowers it can support.”

David Lownds, head of operations at The Hanley Building Society, said: “We have an appetite and a responsibility to lend to first-time buyers and with the benefit of competitive mortgage insurance, we are able to do so within our risk tolerance.

“The first-time buyer market has traditionally been a market that building societies do well in and I’m delighted that we are doing our share of meeting first-time buyers’ aspirations to help get them onto the property ladder.”