Once upon a time, in the not-too-distant past, a broker was quoted as saying, “I would rather set myself on fire than send a case to Accord.”
It was that damning indictment that lit another fire, underneath the bosses at the intermediary arm of Yorkshire Building Society (YBS), and transformed the lender into the broker favourite it is today.
Jeremy Duncombe, already well known in the industry for roles at Advantage, L&G Mortgage Club and Santander, among others, joined just as efforts to vastly improve the business were at full speed, taking on the title of director of intermediary distribution in January 2018.
“That comment was the catalyst for change, and it wasn’t lip service,” says Duncombe, since promoted to managing director.
Building a profile and proposition based not just on price can stand you apart from the competition
“Mike Regnier, Charles Canning and David Robinson really wanted to make that change. The three of them went out to the market to ask what Accord could do to be proactive and supportive and to put the broker first, and that’s what I inherited: the ambition to really make that change.”
Accord was founded as the intermediary-dedicated arm of YBS in March 2003 and is the longest-standing brand exclusively for brokers established by a building society. Of the reason for the launch, Duncombe says its main ambition was to serve borrowers who couldn’t get a mortgage by traditional means.
“YBS was looking at diversifying and moving to a more formal approach for brokers. Prior to that all the lending had been done through the branch network,” he says.
Lenders need to help brokers understand what they want
It launched to the market with products such as professional mortgages, which weren’t available directly through the YBS branch.
“It was quite different in those days; high-street lenders dealt with the prime market and brokers were much more involved in specialist lending,” says Duncombe.
“A lot of the specialist lenders at the time were US investment banks — like Platform, Mortgages PLC, Kensington — all funded in a slightly different way. There weren’t many high-street lenders doing specialist lending.
“Accord launched with a range of offset products, fixed and trackers, plus a 100% mortgage professionals deal, with the aim of bringing mortgage products to borrowers who weren’t serviced by the high street. And that was the starting point.”
We want to consolidate our position of having really strong rates for the majority of customers
The Accord team was set up 20 years ago by then managing director Linda Will and the response from the broker community was strong, says Duncombe, with the lender progressing to expand the range into self-build and the now-defunct self-certification mortgages. By 2005 it was offering shared equity scheme products and mortgages for key workers.
The applications were online only — a key USP for the lender and quite advanced for the early noughties.
“Setting up systems from scratch that worked for brokers was a key success factor,” he says, “plus building bespoke intermediary products without being constrained by a legacy system.
The relationship I see between brokers and lenders is probably the strongest it’s been
“It had a lot of best-buy products too, more so than larger lenders, and the volumes grew quickly. There was an increase of 50% in 2006 over 2005.”
Building society mentality
Of course, the credit crunch hit and things became notoriously difficult for the whole market.
“The 2008-to-2010 period was really difficult, but one of the best things Accord did at that time was look after its staff. It didn’t make anyone redundant,” says Duncombe.
“That’s a theme we’ve stuck to and it was the same during Covid; we kept all our staff on. That building society mentality of working closely with both colleagues and customers has served us well.”
We focus on our common-sense underwriting. Brokers can always talk to our underwriters
How Accord managed the many challenges of the pandemic is what Duncombe names as the proudest point of his career.
“We didn’t put anyone on furlough. We quickly put our business development advisers on working from home and were able to launch a web chat as a way of dealing with brokers.
“The team came together, everybody’s roles changed and we communicated to brokers everything we were doing as much as possible. We then hit the ground running once the opportunity was there again.”
Being a building society has also helped YBS and Accord in financially difficult times.
We want to continue to evolve. While we had our record year at YBS last year in terms of gross lending, we can’t stand still
“For us, having savings as a safety net when other forms of funding dry up gives you the ability to keep trading. Accord still uses a number of funding methods but, if the markets are closed for securitisation or whole-loan sales, we have got a savings book to allow lending to continue.”
Before he joined the team, from the outside looking in, Duncombe kept a close eye on Accord and its progress.
“It was always a very price-competitive brand. I had the chance to look at things from a distributor point of view in my five years at L&G [Mortgage Club] and it really helped with my role when I came to Accord. I saw who did things really well and what brokers really needed and wanted.
Having savings as a safety net when other forms of funding dry up gives you the ability to keep trading
“You learn how relationships can work successfully, as well as what doesn’t work; what has been tried and hasn’t gained traction. You learn that building a profile and proposition based not just on price can really stand you apart from the competition.”
Working together
In terms of how brokers and lenders can best work together, Duncombe says it’s not just about packaging a case.
What this year does in particular is bring out the value of advice
“Of course it’s great when the cases are packaged well but lenders have a role to play in that. Lenders need to help brokers understand what they want.
“From our point of view, we focus on our common-sense underwriting. Brokers can always talk to our underwriters; they have the flexibility and autonomy to make those decisions.
“They can say to a broker, ‘If this was your money, would you lend it?’ and, ‘If the answer is yes, then talk to us.’
The building society mentality of working closely with both colleagues and customers has served us well
“It’s not a black-and-white decision. One of the most frustrating things for a broker is when something is turned down because that’s the policy. You also don’t want that piecemeal underwriting where you ask for one thing and it comes back, and so on. That’s one of the things we’ve really focused on in the past five years.”
Always seeking feedback
Accord has continued that early approach of going to the broker market and asking what it could do better. It recently sent a questionnaire to brokers, seeking feedback on areas of improvement.
“It helps us to develop our strategy with them, particularly after Covid, to know what they want and how to use our sales team in the best possible way.”
Setting up systems from scratch that worked for brokers was a key success factor
Recent years have been incredibly difficult for the mortgage market, from the unpredictable Covid impact to the fallout from the 2022 mini-Budget.
But the industry proved resilient and Duncombe says the hard times brought brokers and lenders to the best place they have been in his career.
“The relationship I see between brokers and lenders is probably the strongest it’s been. There’s a lot more understanding, from both sides, of the challenges and pressures each face, and a lot more dialogue going on.”
In terms of the future, Accord’s focus will continue to be on supporting underserved borrowers and launching products along the lines of its Cascade Score and LTI Boost, which offer options for borrowers who couldn’t get a mortgage or would have had a much higher rate elsewhere.
There weren’t many high-street lenders doing specialist lending back then
“We want to consolidate our position of having really strong rates for the majority of customers. We will continue to develop in helping people we couldn’t help before, and looking at areas where there may still be gaps and getting products for that demographic.
“We want to continue to evolve. While we had our record year at YBS last year in terms of gross lending, we can’t stand still.”
Stability
If Duncombe had one (realistic) wish for the market in 2023, it would be for stability.
“That’s what we’ve been craving because, with stability, the market can operate in whatever normal is at the time. What’s not helpful for anybody — customers, brokers or lenders — is when you have volatility that you have to react to. It makes planning difficult; it makes choosing rates and advising really difficult.
I inherited the ambition to really make that change
“We expect the market to be down by about £50bn this year but there’s a really strong remortgage market currently, a really strong product transfer market, and there are green shoots in the purchase market and new-build sector. If we know we have stability, people start to make decisions.
“Wherever the rates are at — be that 3%, 4% or 5% — and if people know roughly they’re going to stay there, it’s easier to measure affordability.
“What this year does in particular is bring out the value of advice. Every scenario will be different, every customer’s situation will be different, and therefore the need for advice is more important than ever.”
This article featured in the March 2023 edition of MS.
If you would like to subscribe to the monthly print or digital magazine, please click here.
