by Mark Johnston
In today’s current climate mortgage lenders are tightening up. Recent rate hikes and further lending restrictions are meaning that mortgages are being pulled further and further out of reach for first time buyers, as well as those moving or re-mortgaging.
However, it seems that at least one lender is bucking the trend. Nationwide has recently announced that it is cutting some of its mortgage rates and fees. The building society has cut the cost of some deals for the second this month, it has cut all its 2 and 5 year fixed rates by 0.10%.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said “while Nationwide has cut some of its mortgage rates, it is likely to be in the minority because it is less dependant on the wholesale markets and therefore less exposed in the euro zone than some of its competitors”.
The building society has also announced a sharp rise in their mortgage lending with in the last year, gross mortgage lending, the volume of new loans, at Nationwide was 44% higher for the year up to April 2012 than the previous year, with £18.4 billion lent. This comes at a time when lending across the market was up 5%.
The Nationwide added that its underlying profit for the year was £304 million, which too is up 10% from £276 million last year.
The Swindon based building society has insisted that it has not relaxed its lending criteria, but that they have written a third of all new mortgages taken out this year as traditional lenders scaled back in the moribund housing market.
The provider has proved its commitment to helping more first time buyers on to the property market with 24,000 customers being granted mortgages, this is also up 9% on last year.
Another reason for Nationwide’s increased lending is that customer service has remained a huge focus and they are rated number one on the high street for customer satisfaction. Their complaints levels are also 56% lower than in 2010.
The Financial Service Authority (FSA) reports that Nationwide accounted for only 1.55of all industry complaints.
Graham Beale, Nationwide’s chief executive, said “Nationwide is the UK’s largest mutual building society, our financial position remains strong and robust. We continue to position ourselves as a challenger brand, a real and viable alternative to the established banks for the provision of retail financial services”.
Research has shown that building societies on a whole have weathered the credit crunch storm well; this may have been due to the fact that most of them did not get involved with the risky lending that shook the world economic structure.
Tony Yorke, principle of think strategically, a consultancy advising societies and other financial service firms, suggested “building societies that have stuck to what they know have done relatively well and kept out of trouble”.
In conclusion, taking all the above in to consideration it seems, for now at least, that Nationwide could be the go to lender for anyone looking for a new m
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