myi: How has the changing market affected building societies?
Like all financial services businesses building societies have not found it easy to adjust to a world where Bank Base Rate has remained at 0.5% for almost three years. Rates in retail markets have been much higher and the disconnect between the two has proved challenging.
However, because Societies generally didn’t indulge in the riskier practices pre 2007 they haven’t found life quite so difficult.
myi: Do you think lenders are doing enough to support first time buyers?
Building Societies are doing what they can. Many of the biggest lenders outside of mutuals seem to have withdrawn almost entirely from the first time buyer market. Some of this has been driven by regulation but much of it is to do with the requirement to provide much more capital for higher loan to value lending.
myi: With consumer confidence at its lowest, how can we change the public’s perception of the financial industry?
The RBS bonus and Fred Goodwin’s knighthood affairs have certainly not helped the image of the industry.
Businesses need to embrace the concept of Conduct and clearly demonstrate they are putting their customer’s needs first and not looking for short term profits which the public believe are being driven by the Bonus culture.
myi: Would you agree that regulation is too restrictive?
I think that until very recently I would describe regulation as misdirected rather than too restrictive. We did have a period of shutting the stable door after the horse has bolted but I have to say it’s difficult to argue with the main direction being taken by the FSA in the move to the new regulatory framework.
The key question is how will the PRA and FCA work and can they work effectively in tandem and so not create additional bureaucracy.
myi: Is the market set for a revival?
In my view we will see the housing and mortgage markets continue on regionally divergent paths. London, South East and East of England will continue to make steady progress but the rest of the UK is likely to be stagnant for most if not all 2012.
