Speaking at the annual BSA lunch David Cutter said that many mutuals had been consistently lending in the lower deposit space for months and some for years.
He said: “We wait with interest to see what impact the government’s Help to Buy mortgage guarantee scheme will have upon the market.
“I make the observation that so far no building society has signed up to the scheme whereas all the major banks and a few challenger banks have done so.
“I question whether such a scheme was ever needed by building societies.”
In 2013 one in every three loans by a mutual lender was made to a first-time buyer accounting for 31% of the whole first-time buyer market, 29% of which were made at 90% loan to value or above.
And Cutter said he was concerned about the confusion which existed among consumers and pundits who kept “muddling up” elements of the two schemes or believed benefits did not exist at all.
A recent survey among first-time buyers and home movers showed that 43% didn’t understand the scheme benefits with a significant minority wrongly believing that they could borrow more, that their monthly payments would be lower or the scheme would protect them if they could not make their payments.
Cutter said action to counter-balance unaffordable housing, which is locking first-time buyers out of the market, was to build more homes.
He added: “There has been a modest uplift in new house starts but nothing yet approaching what we need.
“In their turn house builders blame the planning system, something over which the government has control.
“Whatever the block or blocks are, this is something that must be resolved if our growing population is to be housed.”
