Cambridge Building Society on construction risk

Chief Risk Officer of the Cambridge Building Society, Victoria Stubbs, joined our filmed panel discussion at One Angel Court, City of London, on modernising mortgage lending to match new types of construction, and changing perceptions. She also commented on how the role of the CRO in financial institutions has evolved since the 2007 crash. Please watch Victoria discussing this above.

Paul Broadhead, Head of Mortgage Policy at the Building Societies Association, had earlier commented on how out-of-date phrasing influences both professional and consumer behaviour: 'What is the consumer appetite for living in these homes? The challenge lies in the terminology, with phrases like “pre-fabricated home” having negative connotations. If you ask ‘Would you like to live in home that is precision-built?’ then you are likely to get a different response. We published the report (in 2016) with a view to start the conversation about bringing new methods of construction into the mainstream.'

Professor Nick Whitehouse a senior lecturer from Oxford Brookes University joined our discussion on behalf of Buildoffsite to talk about devising a benchmark of common warranty and insurance standards that lenders can reference when considering mortgage applications on properties built with modern methods of construction: Build Offsite Property Assurance Scheme (BOPAS).

Victoria Stubbs, Chief Risk Officer, Cambridge Building Society, summarised:

'It’s really important to hear what BOPAS is achieving. It is about ensuring that we have adequate assurance, it’s about knowing that the property is easy to repair, it remains marketable, and is adequate security for our loans which may be for 35 years.

BOPAS, covering assurance and insurance standards, is part of a jigsaw we need in order to develop a market for MMC, with our surveyors on-board. We need economies of scale to ensure there is an adequate market for properties built in this way.

It is essential that there is a level of education and understanding within the surveying community as to what ‘modern methods of construction’ means because it is such a broad term – as a small lender understanding MMC is helpful as we can work with smaller developers – such as Hill – and this is where building societies can add value.'