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Nationwide: Gross mortgage lending up £5.5bn

Gross mortgage lending grew by £5.5bn to £18.2bn in the six months between April and September 2021, up from £12.7bn in H1 2020, according to Nationwide Building Society.

However, its market share fell to 11.4% from 12% in H1 2020.

It lent over £5bn to first-time buyers, supported by its new Helping Hand mortgage and return to 95% loan-to-value (LTV) lending.

As well as this, its deposit market share rose to 9.6% up from 9.4% in April 2021 and current accounts grew to 8.7m up from 8.5m in April this year.

Underlying profit increased to £850m for the period ending 30 September, up from £305m in H1 2020.

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Statutory profit increased to £853m up from £361m in H1 2020, benefiting from a growth in net interest income to £1,706m, a net release of £34m of credit provisions and £133m increase in other income.

And net interest margins improved to 1.24% up from 1.15% in H1 2020.

Joe Garner, chief executive of Nationwide Building Society, said: “Early in the pandemic we made decisions to stand by our members and to protect our financial strength.

“This year we continued to support our members and have delivered a very strong half year performance, with capital reaching an all-time high. As a mutual, profits are retained to invest in the Society for the benefit of its members and wider society over the long
term.

“Over the last six months we have focused on providing highly competitive products for our mortgage and savings members. These have been very popular, resulting in a successful ISA season, increased deposits, higher mortgage lending, and a larger share of the current
account market.

“We continue to focus on providing the high-quality personal and digital service our members expect of us, and have led our peer group on satisfaction for over nine years.

“We have delivered value to members through our member prize draw, the restarting of our current account switching incentive and the launch of a scam checker service.

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“Our success is a testament to the strength of our mutual business model, to the hard work of our colleagues, and to the value we provide to our members.

“Given the level of uncertainty about the future, the strength of our finances gives us freedom to make choices, and confidence in continuing to support our members, colleagues and communities.”

Chris Rhodes, chief financial officer, Nationwide Building Society, added: “During the last six months, the Society has delivered strong performance across our three main product areas of mortgages, savings and current accounts.

“During the pandemic, strong demand for mortgages, coupled with macro-economic uncertainty, led to higher margins on mortgage lending. This resulted in significantly higher income, and a very strong overall financial performance.

“Net interest margin improved, but is unlikely to be sustained at this level in future due to intense competition in the mortgage market.

“We have continued to focus on efficiency and our costs remain flat despite further investment and growth of our business. While the improving economic outlook led us to release some of the credit provisions taken during the pandemic, there still remains
significant economic uncertainty.

“Our balance sheet strength, as evidenced by our very strong CET1 and UK leverage ratios, means we are well positioned for what remains an uncertain period ahead.”

By Jake Carter

Source: Mortgage Introducer

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Mortgage approvals jump to four-year high in December

Mortgage approvals surged in December to a four-year high, data published on Monday showed.

According to UK Finance, the banking lobby group, house purchase mortgage approvals by the main high street lenders rose to 46,815 in December from 44,058 in November, the highest number since August 2015. Analysts had been expecting the figures to remain largely flat, at around 44,000.

Gross mortgage lending across the residential market was £22.2bn in December, bringing the total for 2019 to £265.8bn, 1.1% lower than 2018’s figure. A total of 982,286 mortgages were approved, a 7.4% increase on the previous year.

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Howard Archer, chief economic advisor to the EY ITEM Club, said mortgage approvals would have been “significantly lifted by increased confidence and reduced uncertainties” following December’s general election.

He continued: “Prior to November, mortgage approvals for house purchases had fallen back for three successive months to be at a seven-month in October, indicating that activity was being pressurised by heightened uncertainties over the domestic political situation and Brexit.

“Housing market activity, and possibly to a lesser extent prices, could be given a modest lift in 2020 if the government introduces specific measures aimed at boosting the sector in the Budget. Furthermore, mortgage interest rates are at historically low levels; indeed there is clearly a real possibility that the Bank of England could cut interest rates in 2020.

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“However, the economy still looks set for a pretty challenging 2020, so the upside for house prices is likely to be limited. Furthermore, Brexit concerns could very well pick up again as 2020 progresses, due to concerns over what will happen at the at the end of the year if the UK and European Union have failed to reach agreement on their long-term relationship.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The jump in mortgage approvals in December likely solely reflects the stimulus provided by the sharp fall in mortgage rates in the second half of last year; the additional boost to approvals from the result of the general election is still to come. All the evidence so far points to a further rise in demand after the election. The new buyer enquiries balance of the RICS Residential Market Survey leaped in December to its highest level since January 2019.”

UK Finance also said that credit card spending rose 7.3% year-on-year to £11.8bn in December, with repayments continuing to offset spending, meaning the overall level of borrowing through cards grew at a slower rate of 2.4% annually.

Personal borrowing through loans was 14% higher year-on-year, while overdraft borrowing eased 0.8%.

Previously the British Bankers Association, UK Finance represents more than 250 firms.

By Abigail Townsend

Source: ShareCast

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Mortgage approvals jump to four-year high in December

Mortgage approvals surged in December to a four-year high, data published on Monday showed.

According to UK Finance, the banking lobby group, house purchase mortgage approvals by the main high street lenders rose to 46,815 in December from 44,058 in November, the highest number since August 2015. Analysts had been expecting the figures to remain largely flat, at around 44,000.

Gross mortgage lending across the residential market was £22.2bn in December, bringing the total for 2019 to £265.8bn, 1.1% lower than 2018’s figure. A total of 982,286 mortgages were approved, a 7.4% increase on the previous year.

Howard Archer, chief economic advisor to the EY ITEM Club, said mortgage approvals would have been “significantly lifted by increased confidence and reduced uncertainties” following December’s general election.

He continued: “Prior to November, mortgage approvals for house purchases had fallen back for three successive months to be at a seven-month in October, indicating that activity was being pressurised by heightened uncertainties over the domestic political situation and Brexit.

“Housing market activity, and possibly to a lesser extent prices, could be given a modest lift in 2020 if the government introduces specific measures aimed at boosting the sector in the Budget. Furthermore, mortgage interest rates are at historically low levels; indeed there is clearly a real possibility that the Bank of England could cut interest rates in 2020.

“However, the economy still looks set for a pretty challenging 2020, so the upside for house prices is likely to be limited. Furthermore, Brexit concerns could very well pick up again as 2020 progresses, due to concerns over what will happen at the at the end of the year if the UK and European Union have failed to reach agreement on their long-term relationship.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The jump in mortgage approvals in December likely solely reflects the stimulus provided by the sharp fall in mortgage rates in the second half of last year; the additional boost to approvals from the result of the general election is still to come. All the evidence so far points to a further rise in demand after the election. The new buyer enquiries balance of the RICS Residential Market Survey leaped in December to its highest level since January 2019.”

UK Finance also said that credit card spending rose 7.3% year-on-year to £11.8bn in December, with repayments continuing to offset spending, meaning the overall level of borrowing through cards grew at a slower rate of 2.4% annually.

Personal borrowing through loans was 14% higher year-on-year, while overdraft borrowing eased 0.8%.

Previously the British Bankers Association, UK Finance represents more than 250 firms.

By Abigail Townsend

Source: ShareCast

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UK Finance: Mortgage approvals on the rise

Mortgage approvals rose while gross mortgage lending dropped in November, the UK Finance Household Finance Update has revealed.

Mortgage approvals for home purchases by the main high street banks in November were 6.8% higher whilst remortgage approvals were 12.7% higher.

Gross mortgage lending across the residential market in November was £23.1bn, 3.3% lower than in the same month in 2018.

David Hollingworth, associate director of communications at L&C Mortgages, said: “I suppose it’s positive the approvals were quite a bit higher.

“I just think we had some volatility last year and it’s encouraging to see approvals by the banks up quite a bit, with remortgaging even more so which is what you’d expect with the focus on remortgages with political uncertainty.

“This is a more positive story coming into the New Year.”

By Michael Lloyd

Source: Mortgage Introducer

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UK Finance: Gross mortgage lending increases in July

Gross mortgage lending across the residential market and mortgage approvals both rose in July, UK Finance’s Household Finance Update has found.

Gross mortgage lending across the residential market in July 2019 was £26.1bn, 2.9% higher than the same month in 2018 and the highest since March 2016.

Mortgage approvals for home purchase were 16.4% higher, remortgage approvals were 19.4% higher and approvals for other secured borrowing were 12.7% higher than the same month a year earlier.

Andrew Montlake, managing director of mortgage broker, Coreco, said: “July was our biggest month of the year by a distance and on this evidence we weren’t alone.

“Remortgages were the driving force of the rampant activity levels in July, with households taking advantage of the exceptionally competitive mortgage rates available.

“Lenders are awash with cash and borrowers are making hay while the sun shines.

“First time buyer numbers are also surging, especially among those funded by the Bank of Mum and Dad.

“July was the month when the odds of a no-deal Brexit got a lot shorter and this clearly incentivised people to act.

“Borrowers have become increasingly worried that lenders could easily pull down the shutters in the event of a disorderly Brexit and also increase their rates so they’re getting on with it.

“Similarly, a lot of prospective buyers are wary that house prices could bounce back quite sharply if no-deal proves to be a damp squib and the balance of power swings back to sellers.

“Many people have come to the conclusion that there is as much risk to the wait-and-see approach to Brexit as just getting on with it.”

There were 95,126 mortgages approved by the main high street banks in July 2019, the highest monthly total since July 2009 when the figure stood at 99,970.

Richard Pike, Phoebus Software sales and marketing director, added: “These latest figures from UK Finance are the most encouraging for a while.

“The statistics bear out the regional figures released last week, which showed that across every region, other than in London, mortgage approvals were up.

“Mind you, even in London first-time buyer numbers were up in line with the rest of the country.

“As we know the lending figures for July were for mortgages approved up to three months ago.

“It will be very interesting to see what the figures look like in September and October when the latest HMRC figures showed that property transactions fell considerably in July.”

Gareth Lewis, commercial director of property lender MT Finance, said: “At the back end of the summer holidays, these figures are a nice jump into autumn, and a welcome contrast to the subdued data we have got used to seeing.

“High street banks are lending back at 2009 levels so are loosening their credit a little to encompass more borrowing.

“There is also more demand from people buying property, with home purchases also up, which is great news as it shows transactional flow is happening.”

By Michael Lloyd

Source: Mortgage Introducer