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Coventry takes a quarter of mutual mortgage market

Coventry Building Society revealed decent profits amidst mortgage market turmoil, taking 25 per cent of overall mortgage market share for mutuals.

In its half-year figures, the lender revealed net mortgage lending increased by 24 per cent to £851 million, representing three times the society’s normal market share. This equates to almost 3 per cent of the total market, and around a quarter of total net lending by building societies.

This figures becomes all the more impressive after HBoS recently revealed it only had 7 per cent of the net mortgage market.

Coventry, the UK’s fourth largest building society, says mortgages and other loans grew by £862 million in the half year and by £1,930 million since June 2007 – an 18 per cent rise. Gross mortgage advances totalled £1,909 million, a slight increase of 1 per cent over the 2007 first half year.

Profit before tax for the whole group increased by 8 per cent to £35.5 million.

The mutual also reported only 0.18 per cent of its accounts were greater than six months in arrears, one third of the national average.

Coventry chief executive David Stewart attributed the success in the mortgage market to low adverse lending, which only constitutes 2 per cent of its book, alongside strict criteria in its prime and buy to let books.

He says: “We retain a high quality mortgage book and a strong funding position. There’s no doubt that market conditions will remain challenging for the rest of the year and our approach must continue to reflect this. Nevertheless, I believe we have the right business model for today’s uncertain times.”

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