Nationwide lending sharply down
The value of mortgages agreed by the Nationwide building society fell 40% last year as tough credit conditions led it to scale back lending.
It agreed mortgage loans worth £6.7bn, down from £11.2bn the year before, describing its lending policy as “conservative and sustainable”.
The figures are in line with industry forecasts for a sharp reduction in total mortgage lending this year.
Nationwide also reported a 5% rise in annual profits to £686.1m.
Profits were boosted by a sharp rise in retail deposits placed with the building society.
Risk profile
Lenders have scrapped hundreds of deals in response to the credit crunch.
Whilst the environment will remain challenging, the market now has a much more transparent and realistic view of the cost of risk
Graham Beale, Nationwide chief executive
House mortgage market stays subdued
The UK mortgage market remains subdued despite a slight recovery in April, the major banks say.
The British Bankers’ Association (BBA) figures show 38,704 new mortgages were approved for house purchases in the UK in April, up from 35,546 in March.
But this is still down 39.4% compared with the same time a year ago.
The figures show a sharp rise in the number of people remortgaging, highlighting a trend of homeowners switching lenders for a better deal.
Still moving
“It is clear that, contrary to some reports, the mainstream mortgage market has not ground to a halt,” said the BBA’s statistics director David Dooks.
The mainstream mortgage market has not ground to a halt
David Dooks, BBA
The figures only cover the major banks, who have been able to ride the credit squeeze and have continued to offer a wider range of mortgage deals than smaller lenders.
The smaller banks and building societies have been putting deals on hold or withdrawn offers as lending between financial institutions remains tight.
The rise in remortgaging levels - up from 60,410 in March to 74,722 in April - could also be the effect of Northern Rock customers being encouraged to switch lenders for more competitive deals.