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Nationwide mortgage lending down nearly £1bn as profits surge

Gross mortgage lending has fallen by nearly £1bn at Nationwide, the building society’s interim results show.

In the first half of this year there was £13.1bn of gross mortgage lending, down £900m on the first half of 2013.

Net lending also fell by £2bn year-on-year, to £3.6bn from £5.6bn.

Pre-tax profit more than doubled, from £281m to £598m.

Nationwide says the economy is “becoming more tolerant to an increase in interest rates” but warns arrears rates are likely to increase for prime and specialists mortgages whenever interest rates do rise.

Chief executive Graham Beale says Nationwide is not expecting the base rate to increase “before the start of our next financial year”. He expects future rises will be gradual and below pre-crisis levels.

Beale adds the building society’s improved performance reflects a market realignment of net interest margins that is now “largely complete.”

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