Leeds chief in plea to ease up on regulatory reforms in the sector

Peter Hill said a slowdown in the pace of regulatory reform would give watchdogs and financial services firms the “time and space” to think about the potential problems of the future.

Mr Hill made the comments after Leeds Building Society revealed that its pre-tax profit increased by 55 per cent in the first half of 2014 to £38.6m.

Over the half year, the mutual attracted 39,000 new members, taking its total membership to a record 722,000.

New residential mortgage lending also increased by 29 per cent to £1.19bn.

In recent years, all financial services firms have faced extra red tape as regulators placed them under tighter scrutiny following the crash of 2008.

Mr Hill told The Yorkshire Post: “We have seen a huge amount of regulation over the past five years. On the one hand, you think that’s very understandable, we have been through a significant financial crisis, that was predominantly borne out of the actions of the financial services sector globally,

“Clearly, regulators want to make sure that we don’t have a repeat of that. But the traction on the amount of regulation that’s coming through is such that you do start to feel that there is a huge drag factor. So we have just implemented the Mortgage Market Review and we’re now working on the European Mortgage Credit Directive. So that will be yet more regulation around mortgages, which I think will be very unlikely to provide real protection to UK consumers.

“We’re getting to a point where we need to see a break on the volume of regulation that’s coming through, so that it can settle down and it can be assimilated.

“What regulators and firms need to do, is not so much focus on what caused the previous crisis, but to have the time and space to think about where future problems may lie.

“It’s right that things needed to change post the financial crisis, but there does need to be a line drawn that says, ‘we’ve probably done enough.’

“Whenever you make any kind of change, you need some time for that change to settle down and embed, and become effective.”

Mr Hill also said that the housing market was calming down after an intense period of activity last year.

“Outside London and the south east it’s more of a managed return to a more normalised market,’’ he said.

“What we’ve seen between quarter one and quarter two of 2014, is some evidence that the big surge we saw in 2013 is calming down. That’s what you’d expect to see, because there was a lot of pent-up demand for people to move.

“We are seeing evidence that house prices are slowing a little bit, and transactions are levelling off a bit. Looking forward into 2015, we’re expecting house price inflation more in the five to six per cent range.

“Even within the Yorkshire market there are quite distinct pockets, for example, in some places like North Leeds, Harrogate and York, you’re seeing some pretty strong house price inflation whereas in some other areas (there is) not a lot of activity.

“It is about very localised markets.

“The underlying positive with this is that consumers are seeing there is some movement in the property market.”

Mr Hill added: “Our continued strong performance in the first half of 2014 follows a record year in 2013 – this, combined with the progress in delivering our investment programme, enables us to look ahead with a high level of confidence.”