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Nationwide market share contracts and predicts ‘flat’ house price growth of 1% in 2018

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09/02/2018
Giant mutual Nationwide reported gross mortgage lending of £24.1bn for the nine months to December 2017, handing the building society a market share of 12.2%, down from 14.3% in the same period last year.

The mutual said ‘sustained competition and a reduction in buy-to-let mortgage advances’ explained the slower pace of lending growth.

UK Finance gross lending figures for 2016 had Nationwide in second place behind Lloyds Banking Group and ahead of Royal Bank of Scotland, Santander and Barclays, with Nationwide and RBS the only big lenders to gain market share.

On buy-to-let, the mutual said: “Following the affordability criteria changes we made last year, and the impacts of the stamp duty increase and regulation on the BTL market, gross BTL mortgage lending for the period reduced to £2.5bn down from £3.7bn over the same period last year.”

It said net mortgage lending has decreased to £4.3bn, down from £7.3bn in 2016/17 during the period, reflecting lower gross mortgage advances and increased prime mortgage redemptions due to ongoing market competition.

Strong pipeline

Nationwide Building Society, chief executive, Joe Garner, said: “With third quarter mortgage reservations significantly stronger than for the same period last year, we expect a strong final quarter for our gross lending.”

The society’s underlying profit increased to £883m, up from £866m last year where statutory profit was £886m down from £946m in 2016/17.

He added that the society had launched a range of initiatives to support both renters and buyers, including a commitment to build around 250 homes as part of a sustainable housing development in Swindon.

“Looking ahead, we expect the economy to continue to grow but only modestly. Consumer spending, which has been a key driver of growth, has slowed noticeably, and almost three quarters of those surveyed in our Brexit consumer panel expressed concern about the rising cost of goods and services.

“Modest economic growth is also likely to hold back the housing market and house price growth.

“Overall, we expect house prices to be broadly flat in 2018 with perhaps a marginal gain of around 1%.

“We expect competition in the mortgage market to continue and we will prioritise quality over volumes in the long-term interests of our members.”

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