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Nationwide achieves largest ever mortgage market share

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Nationwide Building Society has achieved its highest ever share of the mortgage market, at 15.1 per cent.

Gross lending over the year to 4 April increased 16.8 per cent from £18.4bn to £21.5bn, while its market share increased from 13 per cent in April 2012 to 15.1 per cent in April 2013.

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The group’s pre-tax profit hit £210m over the year, up 3.4 per cent on the £203m achieved a year earlier. Nationwide took a £800m hit over the year to April as a result of its base rate pledge, which means its base mortgage rate – its standard variable rate – will not exceed 2 per cent above base rate.

The building society’s net lending figure over the year was £6.5bn, up 140 per cent on the £2.7bn achieved in the previous year. Its net lending figure was significantly in excess of the £2.5bn it drew from the Government’s Funding for Lending scheme.

Over the year Nationwide advanced loans to 42,000 first-time buyers, up 75 per cent on the 24,000 advanced in the previous year. The building society says one in three prime residential loans it made in the year to 4 April was to a first-time buyer, accounting for almost one in five of all first-time buyer loans.

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Around 0.53 per cent of Nationwide’s prime mortgage book was in arrears of three months or more at 4 April, down slightly from 0.54 per cent a year earlier, whereas its specialist lending arrears stood at 1.75 per cent in April this year, down from 1.87 per cent a year earlier.

Combined arrears were 0.72 per cent in April, compared to 0.73 per cent a year earlier. The Council of Mortgage Lenders’ average was 1.89 per cent as at 4 April.

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The number of properties Nationwide took into possession fell from 1,129 in the year to 4 April 2012 to 600 in the 12 months to April this year.

Its buy-to-let lending subsidiary, The Mortgage Works, suffered a fall in gross lending, despite the wider buy-to-let market growing 14.1 per cent to £16.9bn in the year to 31 March 2013, according to Council of Mortgage Lender figures.

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TMW’s gross advances were £3.3bn in the 12 months to 4 April, down 25 per cent on the £4.4bn advanced a year earlier. This gave TMW a market share of 19.5 per cent market share as at 4 April.

TMW’s net lending also fell over the period, down 42 per cent from £2.8bn to £1.6bn.

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Nationwide executive director Chris Rhodes says: “The last year has seen us take a record share of the residential mortgage market and our net lending has more than equalled the net lending of the whole of the UK mortgage market. We have not simply focused on new customers but, as you would expect from a member owned organisation, we have reserved the very best deals for our existing customers.

We have also given additional help to first time buyers through our Save to Buy scheme and we have now extended that scheme to home movers. As a member of Nationwide you do not have to buy a new home, move or remortgage to benefit. Our BMR borrowers have been sitting on a rate of 2.5 per cent and we believe that this has delivered £800m of benefits to these members over the last year.”

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  1. RegulatorSaurusRex 22nd May 2013 at 9:52 am

    It is worrying to see a lender take risks it has failed to identify.

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