Mortgage lending down at Nationwide
9:35am Monday 18th August 2014 in © Press Association 2014
Nationwide has reported a fall in mortgage lending in the latest sign of cooling in the housing market.
The building society said it had also been affected by new home loan rules as gross mortgage lending fell 9% to £5.8 billion in the first quarter to the end of June.
Its market share also shrank to 11.4% from a strong period last year when it was 15.5%. Competitors stepped up the pressure after a period when they had been more cautious as they were forced to build up their capital base by regulators.
However, Nationwide was boosted by a rise in current accounts and savings deposits as underlying pre-tax profits more than doubled to £263 million from £121 million in the same period last year.
Finance director Mark Rennison said that how long signs of cooling in the housing market would continue was "difficult to gauge".
He said it was unlikely to fall "to any really significant degree", particularly as the supply of housing demand continued to fall short.
But he said of the latest figure: "It is another instalment of some evidence that the market is certainly not continuing to heat up, and there is a degree of cooling going on."
It comes as latest data from property website Rightmove showed a steep monthly fall in asking prices.
Mr Rennison said there had been some impact from the introduction of the Mortgage Market Review - new rules under which lenders have to ask borrowers more detailed questions to check whether they can afford their loan.
He said implementing the rules could have taken some focus off competition.
In May, Nationwide boss Graham Beale said the market in London was starting to ease off its "frenetic" pace.
Mr Rennison said those had been the first signs of "a degree of cooling going on in the market place".
He added: "The evidence has continued to build to support that. We do think we have a seen a degree of cooling in recent months."
Meanwhile, today's quarterly results showed that deposits grew by £1.5 billion to £132 billion and current account market share rose from 6.2% to 6.4%.
Mr Beale said: "Following on from a robust financial performance last year, our first quarter has delivered another strong set of results."
It comes after Nationwide more than doubled full-year underlying pre-tax profits to £924 million in the year to April 4, growing gross mortgage lending by 31% in the 12-month period.