25th November 2014
Gross mortgage lending dropped by almost £1bn at Nationwide in the six months to the end of September, Britain’s biggest building society revealed.
The fall suggests that tougher new mortgage rules may be having an impact on borrowing.
Nationwide lent £13.1 billion in the six months to September 30, down £900m from the previous half year, while net lending was down by £2 billion at £3.6 billion.
Yet the building society’s pre-tax profits more than doubled to £598m as it grew its share of the current account market.
Nationwide said it was confident of maintaining its position as a top three mortgage and savings provider despite strong competition.
It pointed to the start of a slowdown in house prices, but said the market continues to be supported by a strong employment backdrop, low rates and high demand.
Graham Beale, chief executive of Nationwide, said: ” As we look ahead to the remainder of the year, we do so against a background which has seen unemployment falling sharply and the economy growing at an annual rate of around 3%.
“However, with few signs that inflationary pressures are building, and renewed concerns about a slowdown in the Eurozone, we do not expect the Bank of England base rate to rise before the start of our next financial year, with future rises being gradual in nature and settling below pre-crisis levels.”
He added: “The UK housing market staged a strong recovery in the latter half of 2013 and into 2014 and, at a national level, house prices are above their pre-recession peak. It appears likely that the pace of annual price increases peaked in the summer, with recent housing market indicators suggesting that things have begun to slow down.
” Indeed, the latest Nationwide House Price Index showed that in October the annual rate of growth slowed from 9.4% to 9%. However, the market continues to be supported by a strong labour market, low mortgage rates and a demand for housing, which should maintain mortgage quality and prevent any dramatic slowdown in the housing market.”