Nationwide revenues fall as a result of slump in housing market

Nationwide Building Society has reported a fall in revenues over the past year.

The Swindon building society announced a statutory pre-tax profit of £1.8bn for the year ending April 4, compared with last year’s £2.2bn.

Nationwide said that the advantages of higher interest rates were largely negated by an intensely competitive mortgage market throughout the year.

The building society added that the housing market has remained subdued as a result of increased borrowing costs.

The lender attributed the decrease in revenues largely to the £344 million given to members in June last year and the impact of passing on interest rate increases to savers.

In addition, it revealed plans to distribute another bonus to eligible members this June, totalling about £385million.

Chris Rhodes, Nationwide’s finance chief, said that the mortgage market had fallen  by about 27% over the past year, with buy-to-let lending dropping nearly 50%.

“As we look forward, we do expect the market to gradually improve, both as affordability improves from falling interest rates, and with wage inflation running ahead of CPI (Consumer Prices Index) inflation,” he added.

Debbie Crosbie, Nationwide’s chief executive, said:. “We’ve been really pleased with how robust the customers in our society have been, we’ve seen arrears remain low, a very slight uptick, but we’ve seen people continuing to spend,” she said.

Meanwhile, Nationwide announced earlier this year its plans to acquire rival lender Virgin Money in a deal estimated at about £2.9bn. The acquisition is expected to be finalised by the end of this year.