High street lender Nationwide has reported a significant dip in its mortgage lending for the first half of the financial year, a direct consequence of a homebuyer rush to beat the April stamp duty deadline.
Mortgage Market Adjusts Post-Stamp Duty
The building society revealed that net mortgage lending totalled £4.7 billion for the six months to the end of September. This figure is down from the £6.3 billion reported during the same period last year.
This decline was widely anticipated, as a surge of homebuyers completed purchases ahead of April, when stamp duty tax relief became less generous. This brought forward transactions that would have otherwise occurred later in the year.
Despite the drop, Nationwide’s finance chief, Muir Mathieson, stated that the volume of mortgage applications has remained “very healthy” throughout this period, indicating underlying strength in the housing market.
Growth Driven by Virgin Money and Customer Incentives
While mortgage lending softened, Nationwide saw its total income grow substantially to £3.1 billion, largely driven by the integration of Virgin Money, which it acquired last year.
The mutual has also become a magnet for new customers, attracting more switchers than any other banking firm. Key incentives include:
- A pledge to keep all its branches, including former Virgin Money locations, open until at least 2030.
- Attractive cash switch offers.
- Holding the ongoing Which? Recommended Provider current account service award.
This strategy has proven particularly effective with younger demographics. Nationwide has captured a staggering 46 per cent of the student current account market, with more than one in ten accounts being opened in a branch.
Profits, Payouts, and Member Value
Despite the income growth, Nationwide’s pre-tax profits fell from £568 million last year to £486 million. This was partly due to lower mortgage lending and a £400 million payout to members through its ‘fairer share’ scheme. A quarter of these £100 payments went to people under the age of 35.
Dame Debbie Crosbie, Nationwide's chief executive, emphasised the society’s strong position, stating it is “number one for growth in mortgages and retail deposits” and for customer satisfaction. She added that the combination of performance and the Virgin Money acquisition has delivered £1.2 billion of value to members.
In a further commitment to customer wellbeing, Nationwide recently partnered with the Shout charity to provide free, 24/7 mental health support via text message, making immediate help more accessible to its customers and their families.
