Abbey National has denied rumours it is to back out of the first-time buyer and buy-to-let markets, following falling profits over the first half of this year, writes Kirstie Redford.
A national tabloid newspaper reported Abbey would be halving business in these markets after its interim pre-close statement revealed profits were significantly below those reported for the same period last year.
Chief executive of Abbey National, Ian Harley, said the lender would be taking ‘decisive action’ to refocus its portfolio, in light of the disappointing results.
However, spokesperson for Abbey, Sharon Makin, said first-time buyers and amateur landlords would not suffer due to the move.
‘We are not pulling out of the first-time buyer market. We are very active in this area and have just launched a new range of exclusive deals for first-time buyers. Abbey National has always been a responsible lender, never encouraging customers to over-commit themselves financially. Towards the end of last year, we tightened up various elements of our criteria such as lending discretion for larger loans, to reflect how strongly the market has been growing and to ensure borrowers do not take on more than they can afford. However, this was across the board ‘ not specific to first-time buyers.’
The lender said the fall in profits had been driven by additional provisioning and write-offs in the wholesale bank, following its decision to take a more conservative approach to provisioning this year. It also blamed low sales of with-profit bonds.