The lender is not involved in securitisation – which converts mortgages and other loans into tradable securities – and raises capital on loans solely through bank deposits.
After reaching the £8bn of deposits milestone, the bank aims to hold almost four times the amount by 2020. The swelling in deposits would bolster its lending capability and result in better deals for customers, Mr Morley said.
However, changes to tax and underwriting criteria have made the climate less conducive to buy-to-let mortgages, with many industry commentators predicting a fall in deals this year.
Conversely, other niches of the mortgage market have experienced a reverse in fate. The sub-prime sector, for example, is going through a resurgence after having been greatly reduced following the 2007 to 2008 financial crash.
The size of the second-charge mortgage market, meanwhile, has burgeoned to £1bn.
Looking at different market segments
Mr Morley said: “We will continue to look at all the different segments of the marketplace, but our core propositions are residential and buy-to-let mortgages. We also operate in the new-build market where we are working to expand our presence at the moment. There are opportunities out there and over the coming months we will move into those markets."
Mr Morley was coy about elaborating on which markets he referred to.
The Mortgage Market Review is another regulatory event that had a telling impact on brokers’ workload, due to tougher affordability checks and compliance paperwork.
This has resulted in calls by swathes of the adviser community for lenders to raise their procuration fees to reflect the changes.
Metro Bank began paying a fee-for-retention business 18 months ago, Mr Morley revealed. It also operates a mortgage retention proposition that offers existing customers access to a host of rewards for remortgaging, including a £500 saving on product transfers.
Mr Morley said: “We got all the major networks, mortgage clubs and the top London brokers in the same room and said to them: 'Rate switching retention – what do you want?' For the first time in my 25 years in this industry, they all agreed on the same thing.”
CHARLES MORLEY’S CAREER HIGHLIGHTS
Jan 2017 – current
Director of mortgage distribution
Metro Bank
2014 – 2017
Head of mortgage distribution
Metro Bank
2000 – 2013
Head of key accounts;
head of partnerships;
head of sales
Kensington Mortgages
