According to Santander’s latest quarterly results, the lender’s mortgage balances have fallen by around £4.1bn compared to the same period last year to £183bn.
The company explained that it had reduced mortgage lending in the first quarter of this year to keep its loan to deposit ratio “broadly stable” and reduced its customer deposits.
The firm said that 81 per cent of mortgages reaching the end of the incentive period were retained and the average new loan was £230,000, which is slightly down from £237,000 in the same period last year.
Fixed rates made up around 89 per cent of its prime UK mortgage book, with seven per cent attributed to variable rates and four per cent on standard variable rates and follow-on rates. Around nine per cent is attributed to buy-to-let loans.
The company said that 0.64 per cent of its mortgages were in arrears over 90 days past due, which is slightly up from 0.62 per cent in Q4 last year.
Santander added that its profit before tax came to £547m, which is up from £295m in the same period last year. The firm said the higher income was partially offset by higher costs, credit impairment charges and provisions.
Around 2.5 million customers ‘proactively contacted’
The company said it had proactively contacted 2.5 million customers to help them navigate ongoing challenges and helped 14 per cent more customers in the first 10 months of the year.
Looking ahead, the firm said the outlook “remains uncertain” and inflation was likely to dampen consumer spending further and house prices would fall back to 2021 levels.
Mike Regnier, Santander UK’s chief executive, said: “We have delivered a good set of results against a backdrop of turbulence in the global financial sector and ongoing challenges for the UK economy. We agree with the Bank of England that the regulatory regime means that UK banks are well-positioned to navigate such difficulties.
“Thanks to our measured and prudent approach to risk, we retain a resilient balance sheet and strong funding and liquidity.”
He added: “We have remained focused on providing real value for new and existing customers. Following rises in the base rate, we have seen the most competitive ISA period for several years and a further slowdown in the mortgage market.
“In this environment we continue to offer market-leading savings products and a broad range of mortgages.”
“The economic outlook for 2023 remains uncertain with inflation predicted to remain above the two per cent target meaning many households and businesses will continue to face difficult decisions in the months ahead. Providing the support they need across all our channels remains the priority for everyone at Santander UK.”
