According to the latest quarterly report from Santander, the decrease in mortgage lending has continued from the prior quarter, when lending came to £175.2bn.
Within the lending figures, around £116bn was pre-2023 lending and £56.7bn was 2023 and Q1 2024 new business and internal transfers.
Looking at the interest rate profile, £153.6bn were fixed rates, £13.7bn were variable rates and £5.4bn are standard variable rates (SVRs) and follow-on rates.
The report noted that around 20% of the mortgage portfolio matures in the next 12 months and 78% of mortgages reaching the end of their incentive period were retained.
The mortgage arrears rate, which is arrears over 90 days, stands at 0.82%. This is an increase from 0.8% from the prior quarter.
Santander said that arrears were low, which showed its “prudent approach to risk despite the challenging environment for customers”.
The bank added that its current HPI forecast, which is its base case for 2024, shows a 3% increase from the Q4 2023 forecast of a 1% decrease.
It stated that mortgage approvals are showing signs of recovery following a “particularly weak 2023 summer”, but have stayed below the 2022 average of 63,000.
The report said that its profit before tax comes to £391m, which is a fall from £547m in the same period last year.
Results ‘in line’ with Santander’s expectations
Mike Regnier (pictured), Santander UK’s CEO, commented: “This quarter’s results are in line with our expectations. We have seen encouraging growth in our Corporate and Commercial business using our global network to help businesses into new markets.
“We also launched new products to support our customers’ changing needs, including the Edge credit card with cashback and 95% LTV mortgages for new-build properties – supporting aspiring homeowners, particularly first-time buyers.”
He added: “The recent fall in the rate of inflation will be welcomed by our customers, who continue to face cost-of-living pressures. Our prudent approach to risk and targeted support has meant that, in a challenging environment, levels of arrears have remained low.
“Looking ahead, we will continue to leverage both the local and the combined scale and expertise of Banco Santander Group to deliver our strategic priorities for the year ahead. We will maintain our focus on delivering for our customers by offering competitive and innovative products and drive value by effectively managing our costs.”
