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Nationwide warns of fall in mortgage lending
Further evidence of cooling housing market as Britain's biggest building society says mortgage lending down on last year, but housebuilder Bovis reports record sales.
Nationwide is Britain's biggest building society Photo: Alamy
By Graham Ruddick
7:42AM BST 18 Aug 2014
2 Comments
Nationwide, Britain's biggest building society, has reported a drop in mortgage lending in the latest evidence that the country's housing market is cooling.
The building society said that gross mortgage lending fell 9pc to £5.8bn in the three months to June 30, as stricter mortgage rules dampened demand.
The data from Nationwide comes after Rightmove said house prices fell by 2.9pc in early August compared to a month earlier, the biggest summer fall ever recorded.
Britain has seen a surge in house prices over the last year, but prices have started to cool as concerns grow among homebuyers about a potential rise in interest rates and stricter rules on mortgage lending.
Nationwide accounts for 15pc of new mortgages for first-time buyers, so its fall in lending is notable.
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It said that the mortgage market review, which was effective from April 2014, has "impacted customer behaviour" and "led to a period of adjustment for the industry".
Graham Beale, chief executive, said: "Following on from a robust financial performance last year, our first quarter has delivered another strong set of results.
"As a result, we have continued to strengthen our capital position with our CET1 ratio now standing at 16.3pc and our leverage ratio increasing to 3.7pc.
"Nationwide has continued to help members to save, buy their own homes and manage their money in a way that suits their needs. As a result, member deposits increased by £1.5bn, we grew our share of current accounts to 6.4pc and we supported the housing market, helping over 23,000 people to buy their home, with gross mortgage lending of £5.8bn."
Despite Nationwide and Rightmove pointing to a slowdown in the housing market, Bovis Homes, one of the country's biggest housebuilders, reported a record number of agreed sales during the first half of the year.
Bovis said that legal completions rose by 54pc to 1,487, while average sales price rose 20pc to £239,500.
This meant that revenues surged by 75pc to £322m, while pre-tax profits almost trebled, rising from £18.8m to £49.4m.
David Ritchie, chief executive of Bovis, said: "This significant increase is the result of the compound positive effect of increased volumes, improved average sales price and stronger profit margins."
In a sign that Bovis remains confident in the outlook for the housing market, it bought 23 new development sites with space for 4,600 homes during the period.
"This will support further sales outlet growth into 2015 and beyond, which is expected to lead to further strong improvements in return on capital employed," Mr Ritchie said.
Further evidence of cooling housing market as Britain's biggest building society says mortgage lending down on last year, but housebuilder Bovis reports record sales.
Nationwide is Britain's biggest building society Photo: Alamy By Graham Ruddick
7:42AM BST 18 Aug 2014
2 Comments Nationwide, Britain's biggest building society, has reported a drop in mortgage lending in the latest evidence that the country's housing market is cooling.
The building society said that gross mortgage lending fell 9pc to £5.8bn in the three months to June 30, as stricter mortgage rules dampened demand.
The data from Nationwide comes after Rightmove said house prices fell by 2.9pc in early August compared to a month earlier, the biggest summer fall ever recorded.
Britain has seen a surge in house prices over the last year, but prices have started to cool as concerns grow among homebuyers about a potential rise in interest rates and stricter rules on mortgage lending.
Nationwide accounts for 15pc of new mortgages for first-time buyers, so its fall in lending is notable.
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It said that the mortgage market review, which was effective from April 2014, has "impacted customer behaviour" and "led to a period of adjustment for the industry".
Graham Beale, chief executive, said: "Following on from a robust financial performance last year, our first quarter has delivered another strong set of results.
"As a result, we have continued to strengthen our capital position with our CET1 ratio now standing at 16.3pc and our leverage ratio increasing to 3.7pc.
"Nationwide has continued to help members to save, buy their own homes and manage their money in a way that suits their needs. As a result, member deposits increased by £1.5bn, we grew our share of current accounts to 6.4pc and we supported the housing market, helping over 23,000 people to buy their home, with gross mortgage lending of £5.8bn."
Despite Nationwide and Rightmove pointing to a slowdown in the housing market, Bovis Homes, one of the country's biggest housebuilders, reported a record number of agreed sales during the first half of the year.
Bovis said that legal completions rose by 54pc to 1,487, while average sales price rose 20pc to £239,500.
This meant that revenues surged by 75pc to £322m, while pre-tax profits almost trebled, rising from £18.8m to £49.4m.
David Ritchie, chief executive of Bovis, said: "This significant increase is the result of the compound positive effect of increased volumes, improved average sales price and stronger profit margins."
In a sign that Bovis remains confident in the outlook for the housing market, it bought 23 new development sites with space for 4,600 homes during the period.
"This will support further sales outlet growth into 2015 and beyond, which is expected to lead to further strong improvements in return on capital employed," Mr Ritchie said.