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Nationwide reports fall in mortgage lending amid tough competition

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  • 17/11/2017
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Nationwide reports fall in mortgage lending amid tough competition
Nationwide profits fell in the first half of the year amid lower mortgage lending and higher costs for bad debts.  

The mutual reported mortgage lending dropped by 5% to £16.7bn, while impairment charges jumped to £59m, with underlying profit down 4% at £588m over the six-month period.

Low interest rates and fierce competition for borrowers appear to be putting more and more lenders under pressure.

Nationwide also today announced its entry into the later life lending market.

In a results statement, Nationwide today said: “Competition in the mortgage market remains intense, and shows no sign of abating.

“Although mortgage volumes remain strong, we’re prepared for the possibility that intense competition combined with declining consumer confidence may lead to a moderation in gross lending and market share in the second half of the year.”

It added: “The increase in impairments is driven by updates to our provision assumptions to reflect the current economic environment. Delinquency levels remain low across all our portfolios.”

It comes after Virgin Money yesterday forecast its mortgage lending to come in at the lower end of expectations in 2018.

 

Record levels of first-time buyers

However, Nationwide revealed it helped a record 39,500 first-time buyers into homes in the six months to the end of September.

At the same time, the building society’s capital strength is now at its highest ever level.

Nationwide chief executive, Joe Garner said: “Nationwide is in very good shape after another strong set of results.

“The second half may bring tougher trading conditions, but we remain well placed to stand by our members in these uncertain times.

“Nationwide is financially secure and will continue to promote the long-term interests of both the Society and our members.”

The lender said excluding one-off gains from the previous year, profits increased year on year.

Nationwide chief financial officer, Mark Rennison, said: “We grew our current account base substantially, exceeding 7 million accounts for the first time, we increased prime mortgage gross lending, and maintained our share of retail deposits.”

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