Nationwide says house price slump unlikely

first_img Nationwide Building Society, Britain’s second-biggest mortgage lender, reported a 26 per cent jump in first-half profit, and said it did not expect big house price falls despite signs of property market weakness.Nationwide, which publishes a closely watched monthly house price survey, said major price falls were unlikely in 2011 because continued low interest rates would keep mortgatges affordable and prevent a flood of distressed sales.Mutually-owned Nationwide made an underlying pretax profit of £147m in the six months to end-September.The improvement reflected a 44 per cent drop in bad debts as a partial recovery in commmercial property prices since mid-2009 helped more customers avoid defaulting on loans.Britain’s retail banks have all reported stronger profits in the past year as tighter lending criteria and a tentative economic recovery have helped reduce loan impairments.Mortgage and savings-focused Nationwide, the country’s biggest customer-owned lender, has emerged as a relative winner from the financial crisis, snapping up financially weaker rivals including the Cheshire and Dunfermline building societies.The Bank of England, which slashed interest rates to 0.5 per cent during the crisis two years ago, was unlikely to start raising borrowing costs until the end of 2011, Nationwide said.“We think house prices will remain relatively flat for the next few months, with some possible downward migration, but nothing significant,” chief executive Grahame Beale told reporters on a conference call.Surveys show house prices have been falling over the past three months, reflecting scarce mortgage finance and worries over the economic impact of government spending cuts aimed at reducing Britain’s budget deficit.Nationwide also said it was losing out on £300m per year because of a pledge to cap its base mortgage rate at two percentage points above the Bank of England rate, relative to the typical four per cent rate offered by other lenders.Over a third of Nationwide mortgage customers now pay the base rate, and more are choosing to revert to it when their fixed-term loans expire, the company said. John Dunne Show Comments ▼ Tuesday 23 November 2010 5:35 am Tags: NULL Share whatsapp by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastPeople TodayNewborn’s Strange Behavior Troubles Mom, 40 Years Later She Finds The Reason Behind ItPeople TodayMoneyPailShe Was Famous, Now She Works In {State}MoneyPailSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesZen HeraldNASA’s Voyager 2 Has Entered Deep Space – And It Brought Scientists To Their KneesZen HeraldMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesElite HeraldExperts Discover Girl Born From Two Different SpeciesElite HeraldWanderoamIdentical Twins Marry Identical Twins – But Then The Doctor Says, “STOP”Wanderoam whatsapp Nationwide says house price slump unlikely last_img

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