The Nationwide Building Society has reported a sharp fall in its net mortgage lending, citing high levels of competition.
The UK’s largest building society said lending for the year ending April 2018 totalled £5.8bn compared to £8.8bn for the previous year.
The Nationwide said this was due to a reduction in gross buy-to-let lending following the affordability criteria changes it made last year and increased prime mortgage redemptions from ongoing market competition driving highly competitive new business rates.
It stated that its gross prime mortgage lending for the year was a record at £29.4bn, up from £29.1bn reported 12 months before.
Total gross mortgage lending was £33.0bn (compared to £33.7bn) and represented a market share of 12.8% (2017: 14.0%).
Arrears performance improved marginally during the year, with cases more than three months in arrears improving to 0.43% of the total portfolio, despite some evidence of a greater strain on affordability given higher inflation and low wage growth.
In a statement, the mutual said: “The impact on mortgage pricing of competition in the retail lending markets, and our continued focus on delivering long-term value to our members, has meant that £24 billion of member balances have switched across all prime mortgages during the year.
“This includes the continued run-off of our legacy base mortgage rate (BMR) balances which reduced by £6.6 billion to £22.7 billion. We expect our reported margin to trend lower in the year ahead as market conditions remain highly competitive.”