December 7, 2012

Gary Salter is Nationwide’s head of corporate accounts



I think it’s reasonable to say that the mortgage market has fared better during 2012 than many industry commentators expected. I’d be very rich if I had a pound for every time someone said that lenders aren’t lending, but latest figures from the CML, BSA and Nationwide’s own interim results show that there are significant levels of mortgage lending being transacted. 


In its latest monthly bulletin, the CML reported that gross mortgage lending had hit an 11-month high in October. An increasing proportion of this lending is being done in the mutual sector. Recent BSA figures show that mutuals accounted for 24% of all lending in October, up from 19% from the same time last year. Despite the challenging economic conditions, Nationwide has continued to increase the amount it lends. In our interim results announced last month, the Society reported a 15% increase in gross mortgage lending to £10.2bn for the first half of the 2012/13 financial year. Over the last six months Nationwide more than doubled its net mortgage lending meaning that we accounted for 81.8% of all UK net lending over this period – a clear demonstration that while other lenders are seeing their mortgage balances decreasing, Nationwide continues to increase its mortgage book.


One area where Nationwide continues to perform above its market share is in helping first-time buyers. Over the first half of the year the Society helped 20,000 borrowers buy their first home, twice last year’s level.


While it’s too early to assess the full impact that the Funding for Lending Scheme (FLS) is having on the market, the early signs are positive.


Competition in the mortgage market continues to build as lenders have announced a string of rate cuts since the FLS came into affect.


However, one criticism directed at lenders has been that the cuts have only really been on the lower LTV mortgages rather than on those higher LTV mortgages.


While this may be true for some lenders, it isn’t the case with Nationwide. Since August when FLS came into affect, Nationwide has announced six cuts in mortgage rates, with four of these announcements including cuts of up to 0.70bps being on mortgages of 90% LTV or above.


One of the main drivers behind Nationwide’s robust lending figures has been the relationship the Society has with intermediaries who are responsible for the majority of the Society’s mortgage business.


Competitive pricing combined with a high level of service and support has driven brokers to continue to place their clients business with the Society.


While undoubtedly the last year has been tough, if we continue to work together we can make further progress in getting the mortgage market moving.


Evidence shows that our appetite for home ownership is as strong as ever, so while statistics are always open to interpretation, perhaps we all need to focus on the positives that there are some good mortgage deals out there and lenders are looking to lend.

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