Page 8, 14th October 1977
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SUCCESS faces the Catholic Building Society like a wobbly Big Dipper. The society shuns publicity as most companies court it. It is the fastest-growing society, with the broadest lending rate, and gives one of the highest returns on investment. Contrary to widespread belief, it lends money to people of all races and religions.
Its eight directors and a staff of three operate from a shoplike office in a narrow market street near Victoria, London.
Francis Higgins, the managing director and secretary, took a cut in salary when he joined the society in 1969, but the society is not a charity. It operates as small business, within the system and has considerable business and building society experience on its board.
At the same time its lending policy is geared to giving the opportunity of home ownership to people who would not normally qualify. Right from its inception in 1961 it has had this policy.
It lends, for example, to single women and widows, large families. more first-time buyers, and other "high risk" people. For example on average 15 per cent of applicants for mortgages among the other building societies last year were earning less than £3,000 a year, 40 per cent of applicants at the CBS last year earned less than that figure.
It also allows people a longer period to pay hack their mortgages — 25 years instead of the 15 years norm among other building societies.
With the price of homes being so high at present. most big building societies can choose the properties they wish to give loans on and then wait for the right sort of applicant to come along.
Most of the properties they choose are new. and only 23 per cent are more than 50 years old. The Catholic Building Society last year gave half its mortgages on properties over 50 years old.
Because of its broader lending policies does it suffer a higher failure rate than other building societies? "Absolutely not," says Francis Higgins. "In terms of people getting into arrears with their mortgage it's about the same.
-We have never had to abandon a client, though. If we have got near to it we say: 'Let's talk about this and find alternatives.' We have always made sure that such a person has somewhere else to go. In corn mercial terms our failure rate is lower than others."
The return on investment is now being altered, but the CBS pays slightly more than other building societies, and one of the reasons it is able to do this is its very low running costs about £1 per £100. Last year the administration bill came to £30,000.
Investment is pouring into the society at the moment; its assets have increased by 20 per cent in the last nine months and are now over £3 million.
Since its advertising is done largely through Catholic newspapers this shows that the society is receiving con siderable support from the Catholic community.
But its success is its problem. Earlier this year Shelter offered to give public support to the CBS and its policies — an offer which the CBS turned down.
"It would have resulted in a flood of applications for mortgages without the equivalent investment to provide them," says Mr Higgins. "It would have created an imbalance.
"In relation to our size we are lending up to the hilt. We want to grow, but we want to grow slowly. We can't mushroom."
Richard Dowden
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