Nationwide Building Society warns over cooling house prices: start date for new Scots-born boss
The society, which ranks as the second-biggest mortgage lender in the UK after Bank of Scotland-owner Lloyds Banking Group, said that while some house prices have been increasing at double-digit rates so far this year, they could start easing.
Publishing its annual results, the society noted: “Higher property prices and interest rates, together with steep increases in the cost of living, mean housing has become less affordable and we expect housing market activity to slow and the rate of house price growth to moderate in the coming quarters.
“There is a risk of a downward movement in house prices, given the pressure on household budgets.”
Inflation hit a 40-year high of 9 per cent in the year to April, with predictions that it will head into double-digit territory over the summer. While unemployment remains low, this is still squeezing household budgets hard.
Nationwide chairman Kevin Parry said: “We will continue to plan for geopolitical risks and economic pressures arising directly and indirectly from the war in Ukraine, notably the rising energy bills and inflation, which are intensifying pressure on household budgets, which are already under strain.
“Given our financial strength, we are well-positioned to manage these impacts, as well as to evolve our services to meet our members’ changing needs,” he added.
The lender, which rescued the Dunfermline Building Society during the financial crisis, said that it had nearly doubled its underlying profit to £1.6 billion in the year to April 4.
Mortgage lending grew by £6.9bn due to low interest rates and strong housing market. Bosses said the society had helped more than 87,000 first-time buyers into homes.
The group also announced that Scots-born chief executive Debbie Crosbie, who was revealed as the new boss in December, will start the role on June 2, succeeding Joe Garner. Crosbie had been the chief executive of TSB.
The change at the top comes after the announcement in September that after nearly six years in the role, Garner intended to stand down from the board.
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