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Nationwide drives mortgage lending up to £14.7bn in H1

  • 18/11/2016
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Nationwide drives mortgage lending up to £14.7bn in H1
The UK’s second biggest mortgage lender Nationwide increased its gross residential lending by 17% to £17.5bn in six months, up from £14.9bn in the same period last year.

In the half year to 30 September the mutual lender arranged a record 38,600 mortgages for first time buyers, which is an increase of 50% over last year and is targeting £10bn this year.

Nationwide’s finance director, Mark Rennison, confirmed the mutual has hit a mortgage market share of 14.5%.

Nationwide’s buy-to-let arm, The Mortgage Works (TMW) lent £2.8bn in H1 2016 a slight fall from £2.9bn the year before.

The society added its buy-to-let advances have slowed and particularly in London since it increased the minimum interest coverage ratio from 125% to 145%. The society said: “As a responsible lender we took the decision to lead the market in making changes to our affordability assessment criteria to ensure our borrowers do not overstretch themselves. This is expected to result in lower buy to let lending in the second half of the year.”

Net mortgage lending rose to £6bn against £ the previous year, giving it a 33.9% net market share.

The average loan to value (LTV) of new lending in the period, weighted by value, increased 2% to 71% due to its increased focus on first-time buyer lending, however, the society’s overall portfolio LTV has fallen 1% to 54%.

The Nationwide’s residential mortgage arrears have remained flat at 0.45%. And if complaints are referred to the Financial Ombudsman, latest figures show decisions uphold Nationwide in 85% of cases, compared with the 52% industry average.

Total assets grew by £17bn to £226bn at 30 September 2016. This increase is attributable to a £6bn growth in residential mortgage lending.

However, the mutual’s profits reduced to £696m, down from £802m for the same period last year.

Nationwide said: “Our profit performance has reduced in line with our expectations and reflects continued margin pressure due to the prevailing low interest rate environment and the conscious decisions we have taken over recent years to support our members.”

The society attracted 16% of all current account switchers with 377,000 new account openings in the first half. Savers placed £4.7bn with the society in the last six months, an increase of 80% compared to last year.

Joe Garner, Nationwide’s chief executive, said: “Despite recent economic uncertainty Nationwide Building Society has continued to serve the needs of its members just as we have for generations. This has resulted in record current account openings and mortgage lending and a strong growth in member deposit balances, driven by the steps we took to protect savers from reducing interest rates.”

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