Nationwide leads lending surge

Britain's biggest building society, Nationwide, captured almost a sixth of new mortgage lending after a 159% surge in its net advances, the mutual announced yesterday.

The society's declaration that its net mortgage advances in the six months to October 4 were £7.5bn, compared with £2.9bn in the same period last year, came as it emerged that mortgage lending across the industry had reached another new record.

The Council of Mortgage Lending said total gross lending in October hit a high of £27.5bn, prompting the body to warn that with further interest rate rises likely, consumers "should borrow with caution".

For its part, Nationwide stressed it was lending prudently. "We don't play in the racy end of the market," said Philip Williamson, chief executive.

Nevertheless, during the six months Nationwide took a 15.7% share of the net mortgage market - double its traditional 7.9% share. Mr Williamson said the society felt vindicated after it came under fire following a 2001 decision to abandon low-rate mortgage deals that lure new customers at the expense of established borrowers. That saw its share of the mortgage market slump to 3.1%. It predicts house prices will end this year 15% up. The strong growth in mortgage lending helped lift pre-tax profits 22% to £188.4m.