Annual General Meeting
Ahead of the meeting, we asked members to submit any questions they had for the Board of Directors. Below are the questions received, along with the responses.
Q1: What climate change mitigation policies do you have? Eg: financing solar photovoltaic and solar water heating installations alongside mortgages, and financing low energy properties.
A1: We have always been open to assisting with finance for ‘greening’ residential properties as part of the initial mortgage advance or by providing further advances.
Whilst we have not been offering cheaper mortgage rates for properties with good EPC energy ratings, we consider it more important to encourage customers to improve the performance of properties with poorer EPC ratings, therefore contributing towards ‘greening’ the existing UK housing stock. Customers benefit from reduced individual heating costs and carbon generation by using our mortgage advances and retrofitting ‘green’ features to their homes. We are working on how we promote this type of finance and anticipate a formal launch later this year.
The Society itself has embarked on a programme of measures to significantly reduce our carbon emissions at our head office sites by 2030 – we have already switched to an electric van and improved the efficiency of our buildings which are currently being evaluated for solar panels.
Q2: Has the invasion of Ukraine by Russia, and the sanctions introduced, had any impact on the Society?
A2: The Society has a very simple business model which operates wholly within the UK. Funding is provided almost exclusively from savers who all reside in the UK. This funding is used to provide mortgages for properties in England and Wales. The Society has assessed any business related exposures to Russia and Ukraine and it did not find any suppliers or supply chains dependent on that region. The Society therefore believes that it is well insulated against any direct impacts arising from the war in Ukraine.
Whilst there have been wider impacts arising from the war on the general world economy, the Society is well placed to deal with these. It regularly carries out stress tests on its capital and liquidity to ensure it can withstand economic shocks. The Society is well capitalised, highly profitable and holds sufficient liquidity to meet all the stress tests carried out.
Q3: How will the Society deal with higher inflation and rising interest rates?
A3: The Society is not immune from the impacts of rising inflation in the UK, however the majority of its costs relate to salaries and not the purchase of materials. The Society may need to adjust its interest rates for members as interest rates rise. We are very conscious of the impact on members and keep our assessment of the affordability of mortgages under review.