Building society reports record home loan growth
One of the UK’s leading building societies has today announced that home loan lending is up by a staggering 93%, equating to a total net lend just shy of £11 billion.
However, reports suggest that in light of numerous interest rate rises over the last 6 months, housing market growth is likely to “slow” by Q3 2007. The prediction is unlikely to dampen Nationwide’s mood, as predicted price growth is set to increase by 8% despite market conditions.
The building society has also reported substantial growth throughout the last 12 months, with profits soaring to around £650 million. Arrears and defaulted payments for loans and credit cards have also increased by around 45%, however bad debt throughout the group is said to be 30% better than the industry average. Nationwide have also revealed that 40% of all loan applications are currently being rejected, in an attempt to reduce debt levels.
Sub prime lending, orchestrated through Nationwide’s lending arm UCB has reported a 10% decrease in payment arrears for more than 3 months. Nationwide now controls around 10% of the residential market with total net lending up 77% to £11 Billion. Market share is set to increase further as a result of their imminent merger with rival society Portman. The deal will transform Nationwide into Britain’s second largest lender, boasting accumulated assets worth in excess of £165 Billion.
