Nationwide Doing Well
While Nationwide’s mortgage values fell in the last financial year, it says it is taking a prudent approach to lending. It has increased its savings intake, and the number of customers with arrears is less than the industry average.
Nationwide Building Society, the UK’s largest building society, saw the value of its new mortgages fall by 40% last year. There had been, it said, “unprecedented market conditions” which led to such a cut back in lending.
The year to 4 April saw a total of £6.7bn of mortgage lending, compared with £11.2bn in its previous financial year. The figures meant that Nationwide’s share of the mortgage market fell back from 11% to 7.1%. The society, however, said that its approach to lending was now “conservative and sustainable” following the credit crunch, with a focus on quality rather than quantity.
Nationwide’s total lending was £8.9bn over the financial year. That included commercial mortgages, personal loans and credit cards. The building society was able to fund this lending from its retail deposits, which have been boosted by some very reasonable savings rates and by picking up of some business from fleeing Northern Rock customers. Nationwide took nearly 20% of all savings deposits in the UK in the year.
It claimed that its prudent approach to lending has resulted in only 0.36% of its customers, who number some 1.5 million, falling at least three months behind in their mortgage repayments, whereas the countrywide average is much higher at 1.21%. Figures include those from Portman Building Society, which merged with Nationwide in 2007. The Nationwide is pleased with its performance on customer arrears, saying it is doing better than the rest of the industry.
The Nationwide House Price Index saw its first annual house price fall since 1996 in April, and chief executive Graham Beale expects the trend to continue. The credit crunch, he said, was not likely to be over by the end of 2008, and house prices would continue to fall.
The society still has as wide a range of mortgages as mid-2007, but the cost of money has meant that deals are now more expensive. For example, a two year fixed rate is about 1.5% higher now than this time last year.
