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Mortgage Lending Falls Almost £1Bn At Nationwide

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Reading between the lines here is a tacit admission that house prices are primarily a function of mortgage credit... Who'd a thunk it?

Mortgage lending falls almost £1bn at Nationwide

Gross mortgage lending has fallen by almost £1bn at Nationwide, adding to evidence that tighter controls on lending may be curbing borrowing.

Britain's biggest building society said that the figure was £13.1bn for the six months to September 30, down £900m from the six months to March 30.

Net lending was £2bn lower at £3.6bn.

Pre-tax profits more than doubled to £598m as its share of the current account market rose.

New rules, known as the Mortgage Market Review (MMR), were introduced by the Financial Conduct Authority in April to ensure that borrowers could afford to pay back loans.

There is concern that the rules are prompting lenders to restrict mortgages to anyone who will still be paying off their loans into retirement.

Nationwide said it appeared that rises in house prices had begun to slow down. However, it added the housing market "continues to be supported by a strong labour market, low mortgage rates and a demand for housing, which should maintain mortgage quality and prevent any dramatic slowdown in the housing market".

Despite growing competition in retail banking, the society said it was confident of remaining a top three provider of mortgages and savings products. It had an 11.1% share of the mortgage market and 10.6% of the savings stock.

The core tier 1 ratio - a key measure of financial health - has risen to 17.6%, which Graham Beale, Nationwide chief executive, said underlined its position as a safe and secure financial services provider.

"The first six months of this financial year reflect the growing strength of the society and our ability to deliver better service than our banking peers," he said.

Nationwide also said it had increased deposit balances by £3.5bn as the number of members with a Loyalty Saver account reached almost one million.

"We offer an attractive range of products designed to be transparent, fair and good value. As a mutual, we pride ourselves on the quality of our service; we strive to be the best and our record is testament to this ambition," Mr Beale added.

http://www.bbc.co.uk/news/business-30189933

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Love the drop in net lending- 35% down and back to levels closer to H1 2012/13 (£3.2bn in 2012/13). Nationwide have been one of the more (most?) aggressive lenders recently, as FreeTrader noticed lending into what was described in their annual report as a London house price bubble.

They represent something like 20%+ of FTBs market and about 15% overall iirc.

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I'd like to see a split of their lending.

I wouldn't be at all surprised if the majority of this mutual's lending is going to landlords now.

I despise them.

On that note, I see several of the peer to peer lenders are advertising that funds saved with them will 'only be loaned out towards residential property' - supposedly that is to make the savers feel that their money is more secure! Wellesely in particular highlights their BTL lending credentials.

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On that note, I see several of the peer to peer lenders are advertising that funds saved with them will 'only be loaned out towards residential property' - supposedly that is to make the savers feel that their money is more secure! Wellesely in particular highlights their BTL lending credentials.

yeah, give them a body swerve. I', running down my Funding circle account because of this.

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No it's not lending that fuels HPI it's lack of building. Er...

(Just so as everyone realises I'm being sarcastic. It's always about the level of lending.)

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BTL up 3% since April (see page 22 for proper tables):

New business by borrower type(%):

Home movers 33

First time buyers 27

Remortgagers 22

Buy to let 17

BTLers are ripe for the taxing. Their vote is only commensurate to one of their properties.

Edited by Eddie_George

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But what is the net lending position?

I bet landlords try and keep their debt as high as possible.

Page 14:

"Mortgage balances grew by £3.6 billion, of which £2.8 billion was prime lending and £0.8 billion related to

BTL."

So 17% of their market takes 22% of their net lending, assuming this is a valid conclusion.

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Thankyou.

22% is still inordinately high for a supposed mutual.

I don't think they should be in that segment of the market at all.

In fact, I firmly believe they are best placed to establish the first major proper mutual 'building society'.

One that builds homes to rent. With decent tenancy agreements and a right-to-buy at market rates.

Profits would be re-invested with the purpose of improving the quantity and quality of the housing stock to suit a range of pockets. They would over time drive out the extractive private landlords. Exactly what a mutual should do rather than lend money into the existing parlous housing stock and to those chancers who would corner a scarce but essential market.

Well, I'm totally in agreement with that. I have my doubts whether the motivation to do this exists at board level at NW (anymore) though. I know a contractor who worked there for a number of years, it was observed that they had found it interesting to watch the corporate culture change from one where people were willing to stay behind to get things done properly to one where people were doing the absolute minimum to fulfill their contracted hours.

Edit to add, of course this malaise is driven from the top, and can be changed, but I dunno what would have to happen to get the current board aligned with your idea. They have a bad reputation.

Edited by Joan of The Tower

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http://www.bbc.co.uk/news/business-30191315

i'm not sure if this is the same as OP.

"The market is cooler, there is a general slowing down," Mr Beale told me. "We are moving towards a more balanced situation, there was a lot of commentary about overheating in London and the south-east. Things are now more cautious."

Well it appears internally they know it's coming. In the other article they highlight their tier 1 capital.

edited quote

Edited by Ash4781

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