Nationwide upbeat despite 'less business'

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The Independent Online

Britain's biggest building society, Nationwide, predicted its key mortgage business would fall this year with the whole market shrinking alongside the consumer slowdown.

Britain's biggest building society, Nationwide, predicted its key mortgage business would fall this year with the whole market shrinking alongside the consumer slowdown.

Nationwide saw net mortgage lending drop to £10.9bn from £13.2bn in the year to 4 April, taking its market share to 11.8 per cent from 12.8 per cent. Nonetheless, pretax profits climbed 21 per cent to £517.1m as the company increased unsecured lending and deposits and improved efficiency.

Philip Williamson, the chief executive, said: "We expect to do less business again this year. The market will be smaller and more competitive. There won't be such a big cake to go around." He expects the net mortgage lending market to shrink to £70bn from £100bn last year.

It expects house prices to stagnate or only rise by 2 per cent this year, but a crash is unlikely as interest rates remain relatively low and employment is stable, Mr Williamson said. "We're seeing 2,500 new customers every single day, people defecting from the banks," he said. "Our products give people a better deal."

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