In the current economic environment, the role of brokers has never been more important. With the market moving quickly and interest rates on the rise, intermediaries are having to work extremely hard to ensure they explore every single option available to ensure they source the best mortgage deals for their clients.

With the financial impact of the Covid pandemic still lurking in the shadows and the current increase in the cost of living continuing to squeeze the budgets of many UK households, finding a lender that tailors to the vastly different needs of all clients is crucial.

In situations like this, it is important not to overlook the power of building societies when considering the mortgage needs of your clients, as many offer individual underwriting, flexible decision-making and innovative products designed to help customers get the best mortgage outcome for their individual circumstances.

In fact, building societies have been serving the needs of customers for over 150 years and were first established to serve the community by enabling members to pay a sum of money into a central pool of funds on a monthly basis, from which houses for members would then be built.

This focus on members remains today and building societies continue to operate differently to banks by reinvesting profits to service the needs of its savers and borrowers, rather than paying out dividends to shareholders, which means they can also typically offer highly competitive interest rates on mortgage products.

Many building societies also offer a tailored and manual approach to underwriting as opposed to adopting a high-volume credit scoring approach like many larger players, as we understand that no two cases are the same. This allows for a more flexible and greater mortgage approval rate, which is proving to be increasingly valuable in the aftermath of the pandemic and the current rising inflationary economic environment.

According to recent figures from the Building Societies Association, mortgage lending by building societies was up 11% in the third quarter of the year compared to Q2 2022, with gross lending also up by a fifth compared to Q3 last year. Although, it’s worth noting that the number of approvals was reported to be down 9% quarter-on-quarter, which is indicative of the market starting to slow.

The uptick in business leading into the current period could, in part, be due to growing demand for non-standard mortgages in the market, particularly among younger first-time buyers (FTBs). The challenges facing this demographic have been well documented over the years, yet the product offerings within the mainstream market have remained the same.

In contrast, many smaller and more nimble building societies have worked hard to create innovative solutions such as Family Deposit, Joint Borrower Sole Proprietor and Family Buy-to-Let products, all of which help FTBs to capitalise on the accumulated wealth of extended family members to help them get a foot on the property ladder.

We understand that every borrower is different and that some may need a little help in achieving their homeownership dreams, and the success of these products shows there is definitely demand for more flexible forward-thinking solutions in the mortgage market.

Building societies were created to serve the needs of their members and we continue to do this through market innovation, flexibility and by listening to our members. And because we do not need to raise capital from private investors or answer to shareholders, we have the ability to be more agile, which makes us extremely approachable, friendly and always willing to listen when it comes to addressing your client’s borrowing needs.

Ashley Pearson is national BDM at the Loughborough for Intermediaries