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Nationwide announces 48% increase in mortgage lending

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by Jan Harris
Nationwide announces 48% increase in mortgage lending

Despite the slump in the housing market, Nationwide Building Society’s gross mortgage lending increased by 48% to £8.9 billion in the six months to September.

Although the number of first-time buyers in the market continued to fall, Nationwide lent more than £1.2 billion to this group in the first half of the year, 3 per cent more than it did in the previous year.

Over the same period, Nationwide’s subsidiary The Mortgage Works doubled its gross mortgage lending to £2.6 billion.

Graham Beale, Nationwide’s chief executive, said: “It is particularly pleasing to see a 48% increase in our gross mortgage lending, which demonstrates our commitment to supporting growth in the economy as well as meeting the needs of our borrowers”.

Nationwide also reported a 17 per cent rise in underlying pre-tax profits to £172 million in the six months to the end of September, compared with the same period in the previous year.

Although low interest rates are making life difficult for savers, the building society saw a 250 per cent increase in the rate of cash deposited in its savings accounts to £1.4 billion, making it the second largest savings provider in the UK.

Despite the positive results, Nationwide expects conditions to remain difficult until the eurozone crisis is resolved and the UK economy stabilises.

Nationwide has confirmed that it will participate in the Government’s newly announced New Build Indemnity Scheme.

The scheme, which is designed to boost the housing market, will help prospective buyers who are unable to raise the large deposits currently needed to secure a mortgage.

It will allow first time buyers to secure loans on newly built homes with only a 5% deposit, with security for the loan being provided by the Government and housebuilders.

Nationwide already offers a 95% mortgage with a rate of 6.14% through its Save to Buy scheme, and it has not yet been decided if the New Build Indemnity Scheme will make it possible for the building society to cut rates.

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News posted: November 22, 2011

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