The Building Societies Association's (BSA) annual survey also reveals that the building society sector is likely to see greater diversification over the next year and is looking to develop their intermediary channels.
Key findings of the survey include:
- Nearly two thirds (64 per cent) of CEOs think building society net advances will rise
- Nearly three quarters of CEOs (74 per cent) think net receipts will rise
- The majority of CEOs think 2007 will end with Bank Rate at 5.5 per cent or 5.75 per cent
- While the average prediction for house price inflation was a 5.5 per cent rise over the year
- 62 per cent of CEOs said they would look to diversify in 2007
- Before the government’s announcement this week, Home Information Packs did not attract one positive comment and 61 per cent of CEOs think they will have a negative impact on introduction, although this is thought to be short-term
- 89 per cent of CEOs thought the voluntary Home Condition Reports would not be commissioned by consumers
We asked CEOs about the challenges they face over the coming year. Responses ranged from dealing with an increasingly competitive market place and the need to cut cost bases; to even more regulation. CEOs were bullish about the opportunities which lie ahead, noting maximising their mutual advantage, first-time buyers, equity release markets and new technology platforms, as areas for potential.
Adrian Coles, director-general of the BSA, said: “This survey shows that building society CEOs are confident about facing the challenges of today’s mortgage and savings markets. They have strategies in place to grow their business and are looking to make mutuality even more relevant through member participation. From first-time buyers to older people looking to release equity societies are developing products to help those members make the most of their money.
“In terms of the economy, CEOs are confident that, although there are signs that the market is slowing, this will not equate to any kind of 'crash'. Indeed, they predict that business will continue to be steady, that the buy-to-let market is sustainable and that house prices will still rise but at a more realistic rate.”
Meanwhile, Iain Cornish, chief executive of Yorkshire Building Society, has been elected chairman of the BSA for 2007/08. He replaces Matthew Bullock, chief executive of Norwich and Peterborough Building Society, who has held the post for the past year.
Iain became chief executive of Yorkshire Building Society in 2003. He joined the Yorkshire in 1992, initially in a corporate planning role and thereafter held a variety of posts spanning marketing, product development, insurance, compliance and corporate affairs.
Commenting on his election as chairman, Iain Cornish said: “There has never been a greater need or desire on the part of consumers for advice and financial products from a source they feel they can genuinely trust. Building societies have a tremendous opportunity to meet this demand and to build on their unique position in the financial services marketplace. I am privileged to have the opportunity to represent societies large and small who are doing great things for their members and their communities throughout the country.”
John Goodfellow, chief executive of Skipton Building Society, has taken over as deputy chairman from Iain Cornish. John became chief executive and director of Skipton Building Society in 1991. He was educated in Scotland and has spent all his career working in building societies, specialising in data processing and the use of technology to improve efficiency.
