Nationwide records 'best ever' net mortgage lending

Nationwide building society, has recorded the “best ever” net mortgage lending in the first half, increasing 46% to £6bn.

The group accounted for one third of UK net mortgage lending over the past five years and helped a record number of first time buyers at 38,600, up 50% from the previous period. Gross mortgage lending up 17% to £17.5bn for the six month period ended 30 September 2016.

Member deposit balances rose to £4.7bn from £2.6bn with a record number of current accounts opened, increasing 36%. A total of 75,000 accounts switched to Nationwide, up 61%, representing a 15.8% market share.

The bank's Equity Tier 1 ratio was 23.3% and leverage ratio of 4% compared to 23.2% and 4.2% on 4 April 2016 respectively.

Statutory profit however fell to £696m from £802m in the first half of 2015 as lower interest rates tightened profit margins. Building societies find it harder to make money when interest rates are low as the difference between rates paid to savers and paid by borrowers narrows, resulting in lower profits.

Chief executive Joe Garner said: "We have taken the conscious decision to stand by our members, continuing to help them by reducing variable mortgage rates and offering long-term value to savers, even in the current low interest rate environment. As expected these conscious decisions and those taken in recent years have had a knock-on impact on our profits."

Since the EU referendum, the uncertain economic outlook has softened demand but prices will continue to be supported by low interest rates and limited supply of new homes, according to the building society.

In order to combat uncertainty, it set up a Brexit Consumer Support Panel to bring together consumer industry organisations to try to address the challenges facing consumers.The panel will provide insights to the government into consumer attitudes and behaviours in relation to Brexit and promote consumer interests.