Nationwide profits drop amid cooling buy-to-let market

Nationwide insisted that profits remained in the mutual's target range. Picture: Greg Macvean
Nationwide insisted that profits remained in the mutual's target range. Picture: Greg Macvean
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Nationwide saw profits tumble in the first quarter as it braces for a period of potential “prolonged economic uncertainty” and amid a retreat from the buy-to-let market.

The building society said underlying pre-tax profits in the three months to 30 June dropped 18 per cent to £301 million. Statutory pre-tax profits fell from £401m to £322m.

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It put the decline down to a non-recurring £100m gain in the first quarter of last year, and chief executive Joe Garner said profit remained in its “target range”.

The figures also show that gross mortgage lending fell from £8.6 billion to £8.1bn in the period, while net mortgage lending decreased to £2.4bn from £3.5bn.

Nationwide put this down to a “reduction in buy-to-let advances” as a result of the increase in stamp duty for such properties south of the Border that came in last year, and changes to its lending criteria.

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Garner warned that while the building society’s research shows that consumers expect Brexit to leave their ability to access credit unchanged, there were choppy waters ahead.

“It will be important for lenders to balance carefully credit supply with affordability as we seek to support the long-term interests of consumers in a responsible way through any potential economic slowdown ahead,” he said.

“In a period of potentially prolonged economic uncertainty and persistently low interest rates, Nationwide continues to invest in products and services to support the long-term needs of our members.”

Nationwide also said that more people opened a current account with the building society than with any other provider as it saw a total of 202,000 new customers in the period.

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