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Nationwide’s gross lending highest for four years

Nationwide

Nationwide’s gross residential mortgage lending in the six months to 30 September rose 15 per cent year-on-year to its highest level in four years.

In the first six months of its financial year – March to September – in 2011 the lender advanced £8.9bn, which increased to £10.2bn in the six months to 30 September this year.

The rise in lending takes Nationwide’s market share to 14.4 per cent of the market at 30 September, up from 12.4 per cent a year earlier.

Nationwide’s net lending reached £3.2bn over the period, representing 81.8 per cent of the market, up from £1.2bn over the same period in 2011.

The lender claims to have an 18.5 per cent share of the first-time buyer market, doubling its lending to £2.5bn year-on-year, made up of loans to 20,000 borrowers.

At the end of September, Nationwide had drawn £509m under the Funding for Lending scheme, which it says has been used to reduce the interest rates of its new mortgages.

Gross advances through Nationwide subsidiary The Mortgage Works totalled £1.7bn, down from £2.6bn in the first half of the year. Net lending amounted to £0.7bn, down from £1.8bn.

Nationwide chief executive Graham Beale says: “We have more than played our part in supporting the UK’s economic recovery by increasing our lending activities, with our gross mortgage lending increasing 15 per cent to £10.2bn. Within this, £2.5bn was lent to first time buyers, more than double the equivalent lending of a year ago and helping 20,000 borrowers buy their first home.”

Residential mortgage accounts more than three months in arrears amounted to 0.70 per cent – down from 0.73 per cent for the equivalent period in 2011 and below the Council of Mortgage Lenders average of 1.93 per cent.

Profit before tax was £124m, down 48 per cent from £238m in 2011.

Elsewhere, the lender has set aside of £45m to cover the cost of misselling of payment protection insurance, bringing its total provision to £131m.

Looking ahead, Nationwide says it will begin to extend lending to small and medium enterprises from 2014.

Beale says: “We plan to begin lending to SMEs in 2014, bringing our values and standards as a mutual to a market that is crucial to the UK economy. Our plans are progressing well, and we are building the team and infrastructure we need to implement a strong and compelling offering in this sector.”

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