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June 2020 | Market

Stuart Miller: We are all going to need each other

Stuart Miller is customer director at Newcastle Building Society

Our lives have changed and are being reshaped in ways we couldn’t have imagined – the consequences of which will be with us for years to come.

It is natural for us as human beings to want to get back to some semblance of normality as soon as possible. We spend our entire lives trying to put certainty around us, because life is, on many levels, a precarious business.

In my view, institutions that are driven by a strong underlying purpose and have the interest of their customers and partners at heart will not only survive, but go on to thrive.

When we look back at the history of the building society sector, it has done exactly that. It has developed and continued to look after the interest of its members, whatever the times have thrown at it. At the root of this is trust.

It permeates all our business and is as important now as it ever was. The entire mutual model depends on it, and has done from the outset.

The oldest recorded mutual was Ketley’s, founded around 1775 in Birmingham. Founded in a pub by its landlord, Richard Ketley, trust was the bedrock of the organisation.

Back then, success depended on the collection of subscriptions from members that eventually formed the accumulated funds to provide each member in turn with a house – often decided by some kind of draw.

Those that did not get their property first trusted fellow members to continue contributing by making their rent or loan repayments on time until the very last member’s house was built.

There is no doubt that the mortgage market is seeing fast-paced updates right now. There is a confluence of product, criteria and funding challenges that we are all working to overcome.

The mutual model embraces co-operation, and that part of our DNA will be the very thing that ensures we all emerge with the appropriate products and services for our brokers and borrowers.

This ethos of trust is as important today as it was in Ketley’s day. The mechanics may have changed as society has evolved, but the need to work together to deliver the end product – a house for a borrower – still needs brokers and lenders to work together to make sure all that is possible is delivered.

Trust relies on everyone to deliver their part as best they can. This means lending must be sustainable and not irresponsible, so that what we do now does not impact the ability of others to get mortgages further down the line.

As an economy, we do not need another generation of impoverished borrowers and mortgage prisoners. We market our mortgages nationally through intermediaries, and so we place a great deal of trust in our partners; if ever there was a need to work together as a supply chain, then the current time is a vivid real life example.

We firmly believe in the benefits that brokers with access to the whole of the market bring, by providing borrowers with the assurance that they are receiving the right product.

It is important that, as we all find our way back to some kind of normality, we continue to stick to our core values and do what has made us successful to this point.

We will not abandon our commitment to manual underwriting, for example; this is something for which we, with some other societies, have carried the flag as an alternative to the one-size-fits-all underwriting approach that has become prevalent elsewhere in the market.

We will continue to be innovative in developing our product offering, ensuring meets the needs of our borrowers, and offer the human touch of skilled underwriters.

We will look at cases in a holistic manner, rather than as a series of hoops through which customers must jump. Some of this will take a different shape for the time being, and in the future, as we navigate the changing demands of borrowers and the current market conditions.

But we will do that with our broker partners, to whom we are talking now and with whom we are conducting research to make sure we know what the market requires as events unfold.

Our return to a new normal will be a huge undertaking, demanding imagination and commitment from all of us. But at its heart, there are borrowers and savers that need societies like ours now as much as they ever did.