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CV: Mr Marlow joined The Nottingham in 2006 as sales and marketing director. He was previously director of sales for Littlewoods Shop direct. Prior to joining The Nottingham he spent nearly 10 years working for Alliance & Leicester working his way up from a branch manager in 1991 to director of current accounts and savings operations in 2003.

Mortgage Adviser: How was the first quarter of 2008 for The Nottingham?

David Marlow: We have found is the market has suffered a supply side issue so there has obviously been a lot less mortgage deals available. The issue for us in the first quarter is we continued to receive mortgage business probably ahead of where we would want to be so that has been a little bit of a problem. But with the high level of cost of funding at the moment we have a certain appetite to lend profitably this year and we have been trying to find the right level of lending because demand has been outstripping supply pretty well.

MA: How have you had to adapt your strategy to the changing lending environment?

DM: In simple terms we have got to make sure our lending inflow matches our funding plan. There is a strong focus at the moment on funding both in terms of making sure we meet the FSA's liquidity levels, which we are doing, and at the same time looking at the cost of our funding and then matching our lending to that funding so that we can provide mortgages and also represent good value to our members.

MA: What are your main goals this year?

DM: Growth is probably not something we or the rest of the building society industry is necessarily putting down as a priority. Historically we would have been very focused on growing our asset base year on year. This year it is more about taking a steady path towards maintaining our asset size but ensuring we balance lending plans with our funding. So we are going to have to be tactical because the market is changing fast around us. We are taking things one step at a time. We plan a bit, we deliver, we review, we plan a bit and that is really just how you are best to respond when you have a fairly turbulent market.

MA: Would you consider a tranche system such as the one introduced by Kensington in order to be transparent about funding?

DM: That is very much of the time. We look at how you can give advisers certainty but at the same time ensure we do not open the floodgates and have a surge of applications, which then means we will have to pull products quickly and at short notice and we understand advisers do not like this. When we have been out talking to advisers during the course of the first few months of this year a theme that has come through very strongly from them is have had a very frustrating time in terms of getting deals lined up with customers and then they are withdrawn quickly. The sort of route being used by Kensington is one option. We would not rule anything in or anything out at the moment. I think because of the type of lender we are, we are probably more focused on our relationships. I think if control was an issue we would look at the advisers with who we have a long-term relationship with. At the moment we are looking at ways in which we can support advisers with more certainty and more consistency. We are a small lender in relative size of the market and we have been well supported by some excellent intermediaries over a number of years.

MA: How do you see the commercial market developing this year?

DM: As a lender that is relatively new to the commercial market we have got a fairly conservative lending criteria. What we are finding is there are plenty of enquiries out there. There are opportunities to do the type of business we want to do and obviously with some of the wholesale-backed lenders withdrawing from the market such as Commercial First fairly recently, that is providing us with some opportunities. So again, what we are finding is a question of control and finding the right adviser relationships that we can support.

MA: Is there any particular area of the market you are focusing on?

DM: At the moment it is as much about distribution as it is product innovation. We have had a long period of recognition operating in the three-year market and that is the area we continue to concentrate on. We are certainly seeing people are now starting to take a slightly long-term view of their mortgage needs so long-term products and deals are attractive. But really our focus at the moment is on how we can ensure we remain with a consistent presence but control the inflows we are seeing. At the moment we are not seeing an opportunity for innovation. There are opportunities for us to maybe look at types of business we have not done before but obviously we need to approach that very carefully. In a period where you are getting more enquiries than you can deal with, you are not necessarily going to be massively innovative. Having said that we do have a new mortgage system, which we are launching late summer, and that will take us online.

MA: What would you say are advisers' perceptions of The Nottingham?

DM: Certainly one of the things that has held up strongly in the last six to eight months when we have been busy is advisers have told us our service is right up there as one of the best in the market. That is what we like to hear. We are certainly trying to place ourselves as a service-led lender and again that is one of the important reasons why controlling our inflow is very important to us. There are a number of advisers we know are out there that like dealing with The Nottingham but they have said to us that because their whole business model is aligned to dealing with lenders online they have been a little bit more reluctant to use us. Certainly we believe that when we go online those people will come back to us.

MA: Are you looking at entering different areas of the industry?

DM: We have an excellent asset quality because of our prudence through the boom years. When the market turns and lenders have to retrench because maybe they have got to assess their arrears and their possession situation then maybe some opportunities will emerge for us. We are aware of that and we are assessing those opportunities almost on a monthly basis. So while we do not have any plans to launch anything in the next few weeks we are positioning ourselves to understand what is changing in the market and what opportunities are going to emerge and seek to respond to that. Certainly in our next planning phase we are not looking to do anything in particular. We understand where we are in the market and we believe there will be some opportunities emerging and we want to position ourselves to take advantage of that as they emerge. We hope we will be able to move first.

MA: What do you believe is the most important thing you have learnt since working in this industry?

DM: You can never underestimate the speed and power at which the market works. We have all been taken aback by how quickly the mortgage market has changed from a relatively benign situation to one where people are saying they have not seen anything like it for 30 years. The speed with which this situation has hit the market is a real telling point.