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Coventry’s £4.4bn of mortgage lending sustained by remortgage levels

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  • 28/07/2017
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Coventry Building Society reported solid first half gross lending figures at £4.4bn driven by remortgaging, but noted the slump in purchase numbers against last year’s buy-to-let buying frenzy ahead of the Stamp Duty changes last year.

The lender said to May this year, its mortgage balances grew four times faster than the market growth rate and confirmed net lending of £1.6bn.

Its mortgage balance was up 10%, adding: “We continued to see a resurgence in remortgages as more homeowners and landlords seek to take advantage of current borrowing rates.”

The seventh largest UK mortgage lender also grew savings balances by 11% since June 2016, with deposits up by £1.9bn in the first half of the year, taking the mutual’s balances to £29.9bn.

The average weighted savings rate paid to Coventry Building Society members of 1.54% was 0.89% higher than the market average of 0.65% in the first five months of the year.

Statutory profit before tax increased by 2% to £112m against £110m in the same period in 2016.

 

Simple business

Mark Parsons, Coventry Building Society CEO, said: “We are fundamentally a simple business, providing a safe home for savings and using these funds to provide low risk mortgages to UK borrowers. Our consistent and sustainable growth in both of these key markets shows that there remains healthy demand for straightforward good value products and high quality service.”

This month, Coventry for Intermediaries introduced an affordability policy to prevent buy-to-let customers being trapped on high standard variable rates (SVRs) ahead of the regulatory changes on landlord affordability.

Coventry will apply a rate of 5% provided there is no additional borrowing. Where applicants have gross annual income below £40,000, an income coverage ratio (ICR) of 125% will be applied, with an ICR of 140% for higher-rate taxpayers.

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