Nationwide interim profit surges on record mortgage lending

Nationwide, Britain’s second biggest lender, said its interim profit grew sharply on the back of record mortgage lending.

In the six months to 30 September, the London-listed company said its underlying profit surged 27% year-on-year to £801m, while gross mortgage lending rose 14% to £14.9bn, representing 13.2% of the UK market.

"This has been our best ever half year of mortgage lending along with a strong inflow of savings and the opening of over a quarter of a million new current accounts," said chief executive Graham Beale.

"Mutuals, like Nationwide, are different from the banks [...] Nationwide is evidence that you can be successful by doing the right thing.”

However, the building society warned “robust” competition would lead to strong “downward pressure” on its profit margins in the second half of the year.

Beale added the UK housing market remained “healthy and strong” and forecast house inflation to continue at about 3% to 4%, although he expected a cool-down phase in the London property market.

"It [the UK housing market] is healthy and strong, but it's nothing to raise your eyebrows,” he said.

“It's nothing that I'd describe as extraordinary. My expectation is you will see a dampening of prices in London as there comes a point when it the price overwhelms the growth in wages.”