The UK's building society sector has recorded its strongest growth in seven years with assets rising by nearly 15 per cent to £224.8bn, according to consultancy KPMG.
The growth in the sector has been driven by Nationwide, which now represents 45 per cent of the sector, with £100bn in assets in the year to April, up by 19 per cent from £85bn the previous year, which was 15 per cent up on 2002.
Market share for total mortgages outstanding with building societies remained steady at 18 per cent.
The building societies' database is compiled by KPMG from a review of 63 building societies' most recent financial statements from August 2003 to April 2004.
Kent Reliance was the fastest-growing society for the second year running. Its assets rose by 37 per cent to £838m in the year to April from £610m. Portman Building Society also saw its assets grow by 37 per cent, largely due to its merger with Staffordshire Build-ing Society completed in December 2003. Other strong perf- ormers were Swansea with 25 per cent asset growth, Dudley with 21 per cent, Newcastle 19 per cent and Manchester and Chelsea, both with 18 per cent.
Societies have maintained their profitability by cutting costs, with the average cost per £100 of assets reducing to 85p from 90p over the period among the top 19 societies.
KPMG financial services practice partner Richard Gabbertas says: “Growth and profitability remains strongest among the bigger societies, and Nationwide continues to be crucial to the strength of the sector as a whole.”