Nationwide is “open-minded” about providing decrease deposit mortgages that would assist first-time consumers who’re struggling to safe a loan through the coronavirus disaster, its chief govt has mentioned.
The constructing society, which is the UK’s second largest mortgage supplier behind Lloyds Banking Group, is likely one of the few excessive avenue lenders providing loans worth as much as 90% of a property’s value.
Whereas rivals resembling HSBC have “temporarily reserved” individuals’s mortgages worth greater than 85% of the value of a house to clients switching rates of interest with a view to curb surging demand, Nationwide’s chief govt, Joe Garner, mentioned he was not ruling out providing low-deposit loans over the approaching months.
“We’re open-minded,” he mentioned, including that the UK housing market had “proved very resilient” because it was reopened after a close to seven-week freeze through the spring lockdown.
The housing market has since boomed on account of a stamp obligation vacation on properties worth as much as £500,000 and what has been described because the “race for space”, as individuals search for bigger or rural properties to accommodate distant working and extra time spent at dwelling owing to the pandemic.
“We’ve been one of the most consistent lenders in the 90% segment through this period. And that’s great for our members, and you can see, also supporting our financial position,” Garner mentioned.
His feedback got here as Nationwide reported a 17% rise in pre-tax revenue to £361m within the six months to September, in contrast with £309m a 12 months earlier. The rise was regardless of placing virtually £139m being put apart to cowl loans that may not be repaid owing to the pandemic.
Garner mentioned: “For years we’ve said that we are a low-risk business and we will make less profit than some others in the good times, but we will be resilient and there for our members when they need us in the bad times. And actually I think this financial performance, really proves that.”
Nationwide’s gross mortgage lending fell from £16.3bn to £12.7bn within the six-month interval, however Garner mentioned this was due to the lender’s give attention to dwelling purchases slightly than remortgaging. That resulted in its lending e-book being tougher hit by the UK housing market closure, with market share falling from 12.3% to 12%.
Garner mentioned: “We’ve been quite targeted in our lending. We don’t do market share for market share’s sake.”
Nationwide has additionally authorized about 246,000 mortgage fee holidays because the spring lockdown. Solely 15,000 mortgage clients have required extra monetary help after six months.
Whereas Nationwide has prolonged its pledge to maintain its 663 branches open till at the least 2023, Garner has not dominated out additional job cuts.
The constructing society within the means of reducing about 100 roles by a voluntary redundancy programme first revealed to workers in June.