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Mortgages

Nationwide refutes claim lending drop is linked to older borrowers

Samantha Partington
Written By:
Samantha Partington
Posted:
Updated:
26/11/2014

Nationwide has refuted suggestions in the national media that a £900m drop in its mortgage lending is linked to an unwillingness to lend to borrowers into retirement.

In a report by Sky News today, Nationwide’s £900m drop in gross mortgage lending was linked to a finding which emerged from the Intermediary Mortgage Lenders Association’s (IMLA) report over a reluctance to lend to older borrowers.

IMLA’s survey said lenders were shying away from offering loans to any borrower whose mortgage term took them beyond the normal retirement age, considered to be 65.

It revealed that lenders thought the combination of scope for interpretation in the Mortgage Market Review (MMR) rules and the pressure on lenders to protect borrowers left them open to future complaints from consumers and the regulator.

But a spokeswoman from Nationwide said the two factors, the decline in lending and the need for clarity over lending into retirement from the regulator, were not at all linked.

“Nationwide does lend into retirement, subject to the loan being repaid before the 75th birthday of the borrower. Our mortgage lending both before and after MMR has remained strong.”

The building society said its lending into retirement policy was one of the most flexible in the market.

The Nationwide spokeswoman said the main reason for the fall in lending was increased competition in the first half of the year following a withdrawal by some of the main lenders in the latter half of 2013.

“This reflects an element of repositioning within the banking community with more emphasis being placed on retail banking activities. We remain confident in our ability to meet this competition head on and to maintain our market share,” she added.

In its results released today Nationwide confirmed it had lent £13.1bn in H1 2014 compared to £14bn in the same period last year. Its net lending was £3.6bn in the first half of this year compared to £5.6bn in H1 last year.

This gave Nationwide a 12.2% share of all gross lending in the market and 24.8% of all net lending, which it said were both ahead of its par market shares.

The spokeswoman said the society was pleased with its performance over the period.