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Nationwide lends £2.5 billion to first-time-buyers

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by Jan Harris
Nationwide lends £2.5 billion to first-time-buyers

Nationwide Building Society lent £2.5 billion to 20,000 first time buyers in the first six months of 2012-13.

This is double the amount it lent in the first half of the 2011-12 financial year and nearly as much as it lent to 24,000 first time buyers in the whole of the year.

In proportion to its size, the building society would be expected to offer mortgages to 10 per cent of all UK first time buyers.

However, its strong performance in this market has led to more than 18 per cent of all first time buyers taking out a Nationwide mortgage.

Thirty per cent of all its lending in the first six months of the 2012-13 financial year, excluding further advances, was to first time buyers.

This is despite a scarcity of low-deposit mortgages in the market as a whole.

Although the Funding for Lending scheme has increased the amount of low cost funds available to lenders, many have continued to focus on customers who can pay high deposits.

As part of its focus on the first-time-buyer market, Nationwide offers a Save to Buy scheme.

This allows customers to save for a mortgage and offers 95 per cent loan-to-value (LTV) mortgages, with up to £1,000 cash back.

Graham Beale, Nationwide’s chief executive, said “The first half of the year was our highest six month mortgage lending period for four years and we have helped almost twice as many first-time buyers finance their new homes.”

Nationwide has also announced a further reduction in mortgage rates, including first-time buyer loans as a result of the Funding for Lending scheme.

All fixed and tracker mortgage rates across all LTV levels are being reduced, with the biggest cuts on loans with an LTV of 90 per cent.

Nationwide’s two-year fixed rate for those with a 10 per cent deposit will be reduced by 0.7 per cent to 4.49 per cent, or 4.39 per cent for existing mortgage customers.

It is cutting three-year fixed rates by 0.6 per cent to 4.69 per cent, or 4.59 per cent for existing customers.

Five-year fixed rates are being reduced by 0.5 per cent to 4.99 per cent or 4.89 per cent for existing customers.

Meanwhile, HSBC has also cut some of its rates and is offering its lowest ever two year fixed rate of 1.99 per cent.

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News posted: December 3, 2012

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