Anyone working in the mortgage market knows that a key area of our measurement is sales. How many cases we complete, the value of our mortgage book.
Until recently I’d spent my entire career in businesses where the numbers, and the bottom line, were the key drivers of executive decision making. Shareholders, (rightly so) want to see profits.
But as lenders, and intermediaries, our job is about more than just selling mortgages.
This week I spoke to a new teacher. She’s fresh out of university and a couple of weeks into her first teaching role, a career she picked out many years ago.
She’s exhausted but thrilled to be finally stepping foot into her own classroom. But already she’s thinking about how she’ll ever afford a home in the community where she’s teaching.
She’s living rent free with her parents but still knows her route to her own home will be tough. Her solution? Get a few years’ experience and apply to teach overseas in a civilian role for the defence services where she’ll potentially get five years free accommodation and a chance to explore the world.
PASSIONATE ABOUT EDUCTATION
I value education passionately. I think most of us will have had at least one or two teachers or lecturers we can say influenced our formative years in some way.
It troubles me that the teacher I spoke to this week – the passionate young teacher with her whole career ahead of her – is already thinking of taking her skillset elsewhere. There’s nothing at all wrong with her choice, joining the defence services is a great career move and one where she can make a real difference.
“I can’t help but think about what bright young minds might miss out.”
But I can’t help but think about what bright young minds might miss out because she’s not here?
I keep reflecting that she’s planning to leave not because she can’t find a job that she’s qualified to do in a part of the country she wants to live, but because she wants a home of her own, and she sees making a big change as the better route to it.
Home ownership is not an unreasonable dream. In fact, it’s something that every human wants: a place to call home.
And who can deny that teachers, and other key workers, who spend their long days working for the benefit of society, deserve a place to rest and rechange that’s safe and secure and their own.
MORE THAN JUST MORTGAGES
As a CEO of a building society focussed on the education sector of course I’m thinking about the teachers we’re here to serve, but the same actually applies to multiple industries where key workers are taking on careers that are essential to our communities – our nurses, health workers, emergency services and more.
Most people know that as a building society we’re a mutual. Like all building societies we exist for our members. All profits we make are reinvested back into the organisation for the benefit of members, as we do not have shareholders.
I doubt much more thought is given to our organisational make up than these simple facts. But it should be.
With mutuality comes a certain degree of freedom – a freedom to focus on more than just mortgages, a freedom to have a clear vision and purpose.
TEACHERS ARE A LENDER’S DREAM
At Teachers Building Society our vision has been unchanged since the 1960s when we formed. Help teachers buy homes to stop them leaving the profession. We had purpose before purpose was a selling point.
It’s actually as hard now for teachers as it was back then. Not because teachers are still seen as the poor lending prospects they used to be – far from it. Teachers are a lender’s dream – the default rates are almost nothing.
“Getting on the ladder is hard because of the battle to save a 5% deposit.”
Now getting on the ladder is hard for teachers and other lower paid first-time buyers because of the battle to save a 5% deposit after spending tens of thousands to make it through a degree.
Because house prices are so high that in great swathes of the UK a single teacher on a starting salary of £31.5k won’t be able to reach the affordability required to service the required loan.
And even if they think they can overcome those hurdles they now face uncertainty over whether stamp duty changes might come along and impact their ability to step onto the ladder in some new way or other.
SOLVING FIRST-TIME BUYER CHALLENGES
Which is why I’m thankful we’re a mutual and that myself and the team cannot just sell mortgages but actively work towards solving these first-time buyer challenges, something I believe it is our responsibility, along with our industry peers, to do.
Of course we’re still focussed on the numbers: we have to be. With a basic building society model of offering savings to fund mortgages it’s really important we keep growing both sides of the book.
“The more we sell, the more we are doing for our communities.”
But it’s important that we do grow both not because we want to build up giant profits. It’s important because the more we sell, the more we are doing for our communities. The more teachers we put into homes the more likely they are to stay in the profession and keep teaching our children so that they’ll grow up and take on the roles that are essential to society.
TICKING PEOPLE, NOT JUST THE CASE
The other advantage of mutuality is that we get to play in the areas of the mortgage market where other lenders can’t or don’t want to play. The unusual cases that don’t fit a standard profile that makes them simple to review and offer.
Many, like us, continue to offer manual underwriting that means unusual cases because of a property, applicants income or the timing of a purchase makes it unusual can have a little extra human time spent on them, and we can tick the people, not just the case. People who often offer valuable contributions to society.
“Feel proud that you helped someone buy a first home.”
So the next time you complete a case for a teacher or a nurse or a firefighter or another career that we all rely on, don’t just celebrate the bottom line, or feel proud that you helped someone buy a first home.
Celebrate the fact that you’ve given them home security, and that with that they’re more likely to keep doing the job they do which we will all benefit from.
And the next time the phone rings with a new case why not think mutual: we’re more than just mortgage sales and you can be too.
