Credit ratings agency Moody’s advices that mortgages and other financial products from some of the UK’s leading building societies could become cheaper.
Moody’s has said that the performance by Principality, Yorkshire, Nationwide and Coventry building societies has been gradually improving over the last two years. This has made them a better bet to lend to. Newcastle and Nottingham were also included, but to a lesser extent.
Yorkshire, for example, has now seen its subordinated debt rating upgraded by two levels from Ba2 to Baa3, making it a little cheaper to for the building society to raise funds on wholesale money markets. These savings could potentially pass on to its customer in the form of cheaper products, such as mortgages.
According to Moody’s, the building societies for which it had upgraded its outlook has achieved better asset-quality performance when compared to similar institutions.
Moody’s also cited better underwriting standards and “improvements in risk management controls and culture” as reasons for the building societies’ improved financial position.
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