DARLINGTON Building Society (DBS) has given an upbeat view of the mortgage market, reporting a “healthy level of activity” throughout the lockdown period which has further increased since the Government’s easing of the lockdown.
Darren Ditchburn, Chief Customer Officer, has attributed the positive performance of the award-winning Society to its clear ‘Open for Business’ strategy which has been widely welcomed by brokers from across the country.
Despite the challenges of the lockdown, DBS kept faith in the strength of its individual underwriting and portfolio of products at a time when other financial institutions were withdrawing from the market.
That positive strategy followed ‘Darlington Intermediaries’ being given its own identity as part of the Society and launching an expansive new lending policy in February, with the promise to “make complex cases simple”.
And the message to brokers, as lockdown restrictions are eased, is that the Society’s aim is to reinforce its position as a specialist lender, with a flexible approach to applications that take into account individual circumstances.
“The feedback we’ve had so far from brokers, many of whom are self-employed, has been really gratifying,” says Mr Ditchburn. “The overwhelming message has been ‘Thank you for sticking around and doing a great job’ and our aim is to continue to work together to keep the market moving.”
Mr Ditchburn is anticipating that the country will see some “initial pent up demand” from those transactions placed on hold followed by a gradual recovery.
“We are definitely seeing encouraging signs” he says. “We expected the mortgage market to completely stop, but it’s been a pleasant surprise to see how resilient it has been. Naturally, we have seen a reduction in volumes, but we were expecting it to get down to nearly zero, and it’s been nowhere near that.”
In March, DBS was a finalist in the ‘Best Specialist Mortgage Provider’ category, as well as being highly commended as ‘Best Savings Provider’ and named as ‘Treating Customers Fairly Champion’ at the British Bank Awards.
And, in the first quarter of 2020, the Society had seen definite signs of confidence returning following the uncertainty of Brexit, with the fundamentals of the housing market developing optimistic trends.
March was the Society’s best month of the year, with decisions in principle (DIPS) running at double the January figure. That growth was then temporarily interrupted by the lockdown and April experienced a predictable decline, but the number of DIPS in May has exceeded March.
Mr Ditchburn says: “I think we are likely to see the market experience an initial surge in demand, then tailing off again, before settling into a period with a lower level of gradual recovery.
“The longer term impacts will then come down to how successful people have been in retaining jobs. Unemployment will inevitably go up, and any second spike would obviously re-set time frames, but I think we can be relatively optimistic about a recovery over the next 18 months.
Mr Ditchburn expects that mortgage rates will remain very competitive in the short and medium term, with cheap access to funding sources combined with a healthy level of appetite from lenders.
However, DBS will remain consistent with that key decision it took at the beginning of the lockdown to remain open for business.
“One of the reasons Darlington Building Society has been so resilient is undoubtedly the strength of our individual underwriting, and the fact that we have maintained the majority of our lending criteria and product range,” said Mr Ditchburn.
“Our very clear message was ‘we are here to support you’ during this period of uncertainty. We continued to take a view on every individual case, understanding the unique circumstances at play, and rejecting the view that one size fits all.
“One example is how we consider variable income. Why would we penalise people working for an employer where their variable income stream remains resilient, whereas for others who rely on bonus and commission in other industries it might be different? With us, there is no automated decision, there is a higher level of flexibility based on individual circumstances.”
Mr Ditchburn paid tribute to the Society’s staff for the way they have adapted to the crisis, with branches remaining open, and all members of the mortgage teams, alongside the majority of head office staff are working from home.
New ways of working have been successfully introduced, such as digital identity verification process and desktop valuations, and yet the Society has maintained its reputation for service with a personal touch.
“These are undoubtedly difficult and uncertain times, but people still have home ownership dreams, and we are here to help them achieve those dreams. Things may take a bit longer, but we have the structure, the people, and the products to adapt to the challenges,” said Mr Ditchburn.