Nationwide says London housing market is starting to slow down

The London property market is heading for a "natural correction" with the "frenetic" pace of buying beginning to fade, according to the head of Britain's biggest building society.

Graham Beale, chief executive of Nationwide, said: "We could be seeing the early sign of a natural correction in the London housing market."

He added that sales had begun to slacken in the capital, but did not predict a widespread slump. "We are going from frenetic at the start of the year to merely very, very busy."

According to the property website Rightmove, asking prices for property in London have leapt by £80,000 since the start of 2014 alone, and prices in the capital now stand at 30% above their former 2007 peak.

Beale was speaking as Nationwide revealed that profits had leapt fourfold, on the back of a 51% jump in mortgage lending and a £4.9bn increase in savings balances.

Nationwide accounts for around 10% of the UK mortgage market, and around 12% of all savings balances.

The society said the quality of mortgage lending had been stable, with the number of loans above 90% of the value of the property at just 2.4% of its total loan book. The number of its customers in arrears of three months stands at 0.63%, compared with 1.59% across the industry.

Nationwide has been under pressure to improve its capital basis after it fell short last year of a new leverage ratio, and after the problems at Co-operative it remains the last major mutual on the high street. Beale said the society had now secured its future following the issue of £1.5bn in new capital and shares that were significantly oversubscribed.

It said gross mortgage lending was up 31% to £28.1bn, equal to 14.9% of all mortgage lending in the UK, with net lending ahead even more, at £9.9bn, up 51%.

Savings balances rose by £4.9bn to £130.5bn, giving Nationwide a 12.1% share in the UK savings market.

Powered by article was written by Patrick Collinson, for on Wednesday 28th May 2014 09.27 Europe/London © Guardian News and Media Limited 2010


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