Chapter Summary: Mortgages
The “Mortgages” chapter of the report, which was sponsored by Finova, highlights how building societies are evolving to remain competitive in an increasingly dynamic and specialised market. Success is achieved by improving customer service, building stronger broker relationships, and using technology to enhance the customer experience and simplify transactions.
Products and Niches
Building societies are sharpening their focus on specialist lending niches such as buy-to-let, lending into retirement, and holiday lets. This allows them to sustain margins without competing purely on price.
As Mark Selby, CEO of Hanley Economic Building Society, states:
“Most medium and small-sized building societies are focusing on specialist niches where they can maintain sustainable margins.”
Whitecap’s analysis showed that building societies had a greater presence in the majority of niche markets when compared to our previous report in 2021, as illustrated in the diagrams below.
Competition
The mortgage market remains fiercely competitive, with building societies often competing against major banks and challenger lenders. The sector has become increasingly vocal in its support for first time buyers, with many societies doubling down on their aim to help people achieve home ownership.
Paul Wheeler, CEO of Mansfield Building Society, highlights:
“We have strongly supported first-time buyers over the past few years and continue to do so. As a building society, our core mission is to help people secure homes and step onto the property ladder.”
Broker Market
Building societies have a high dependency on brokers and recognise the significant value of these relationships. The intermediary market remains a primary source of mortgage origination, with CEOs viewing it positively and anticipating its continued strength.
Richard Fearon, CEO of Leeds Building Society, remarks:
“The intermediary market is here to stay. It’s resilient and it’s vibrant.”
Technology
Technology is seen as both a competitive advantage and a necessity. Societies are investing in modernising front and back-end processes to drive efficiency and enhance the borrower journey. Use cases include back office upgrades to automate tasks and reduce manual underwriting, as well as upgrading the front end to streamline mortgage origination and servicing.
Will Carroll, CEO of Monmouthshire Building Society, states:
“The mortgage market becomes even harder to compete in if you haven’t got the right technology.”
What next?
Continued innovation and development within niche markets remains essential. For societies active in specialist lending, there is an opportunity to enhance and optimise performance in these areas. Continually refining technology, processes, and service delivery is critical because delivering an excellent experience for both members and brokers is key to retaining market share.
The potential growth of AI and automation in specialist underwriting poses both a threat and an opportunity. Societies must remain proactive and experiment with emerging technologies to ensure they don’t fall behind.
This is Blog 2 in our nine-part series covering the Building Societies Report 2025. You can explore the full series here:
- Blog 1: Strategy & Mutuality
- Blog 2: Mortgages
- Blog 3: Savings
- Blog 4: Branch of the Future
- Blog 5: Homebuying Process
- Blog 6: Green Finance
- Blog 7: Diversification & Collaboration
- Blog 8: Technology
- Blog 9: Regulation, Policy & Risk
The Building Societies Report 2025 was created in partnership with the Building Societies Association and made possible by the support of sector sponsors including: BJSS, Digilytics, Finova, FintechOS, FIS, GDS Link, Mambu, Mast, Monument Technology, Mutual Vision, MQube, nCino, Ohpen, PEXA, Phoebus, RSM UK, SBS, Target Group, Temenos , Unblu, Unisys, and Vilja Solutions.