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Nationwide takes 9.5% mortgage market share

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  • 25/05/2011
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Nationwide takes 9.5% mortgage market share
Nationwide Building Society increased its share of the mortgage lending market, according to its full year results, up from 8.7% in 2009/10 to 9.5%.

The mutual’s gross residential lending was £12.8bn in the last full financial year, or 9.5% of market share, with 23% of new borrowing from first time buyers, which is 9.1% of the total first-time buyer market.

Graham Beale, Nationwide’s chief executive said: “We have continued to make progress with our strategy of diversifying our business and growing our market share in banking products, and are proud of the support we have offered to both our mortgage and savings members.”

The mutual achieved underlying profit of £276m, up 30% on last year,
underpinned by a 35% reduction in provisions for loan impairments and a £5m reduction in its cost base.

Nationwide lent 17,200 first-time buyers mortgages and continued to offer its Switch and Fix products allowing borrowers to move from variable to a fixed rate product with no redemption penalty or fee.

Beale said: “This has enabled us to support the market with total gross lending of £12.8bn, or market share of 9.5% against £12bn in 2010.”

Nationwide had 1,265 listings in the best buy tables last year and added it had seen significant capital repayments as its members paid off debts harnessing the low interest rate environment, so total mortgage balances fell over the year.

Nationwide set aside £16m for Payment Protection Insurance (PPI) compensation claimants, after UK banks were overruled in the High Court on their challenge to overturn regulations regarding the mis-selling of PPI policies.

Beale said: “We have had no significant sales of single premium PPI since 2007, our volume of PPI product sales was relatively low and we had a rigorous sales process in place. Consequently, our own provision for customer redress, with a charge for the year of £16 million, compares very favourably with the several billions announced by the banks during the past month.”

A Nationwide spokesperson said: “Our track record in processing PPI complaints is good relative to our peers. Looking at the FOS GI/PPI complaints league (H2 2010), for the percentage of cases overturned by the FOS, the Society ranked 102 out of 106 firms based on less than 650 complaints.”

He added that only 13% of the Society’s complaints were upheld by the Ombudsman in favour of the customer, compared to the industry average of 63%.

Meanwhile, British Banker’s Association’s (BBA) figures show net mortgage lending figures are at their lowest level ever reported with just a +£26m change in April 2011.

The average loan value of properties bought in April is £145,100 down from a peak of £158,100 in February 2008.

BBA statistics director, David Dooks said: “Individuals and businesses continue to save more, pay off debt and borrow less as uncertainty about the economy has entrenched a ‘wait and see’ attitude.”

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