Mortgage lending falls at Nationwide as house prices cool

Emma Haslett
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The lender said house price growth "peaked" in the summer (Source: Getty)

Mortgage lending at Britain's biggest building society fell £900m to £13.1bn in the six months to the end of September, suggesting "cooling measures" introduced by the Bank of England are taking their toll on the market.

Nationwide added that mortgage lending had "reflected a recent flattening of the housing market", caused by a combination of the Mortgage Market Review (MMR), and a "more aggressive competitive environment". Implemented by the Bank of England in April, the MMR imposes "stress tests" on mortgage borrowers, and limits borrowing to 4.5 times their income.

On top of that, "things have begun to slow down" in the housing market, suggesting "the pace of annual price increases peaked in the summer".

The lender said net lending also fell £2bn, to £3.6bn, but added it had a 12.2 per cent share of the mortgage market during the period, lending to 23,800 first-time buyers. Its share of the market change in Isa balances hit 20.7 per cent.

Impaired balances fell £141m to just over £1bn, while impairment provisions fell to £88m, from £102m the year before.

Pre-tax profits more than doubled to £598m, while Graham Beale, Nationwide's chief executive, said its core tier 1 ratio, a key measure of financial health, had risen to 17.6 per cent, "which underlines our position as a safe and secure financial services provider".

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