Nationwide loses ground in mortgage lending war

The mortgage price war has taken its toll on Nationwide, slashing its share of the new home loans market from 15.4% to 10.1%, it revealed yesterday.

Net mortgage lending in the six months to October 4 totalled £2.2bn, down from £3.2bn in the same period last year. Chief executive Brian Davis said: "People have fought back and there is more competition out there. We always expected there would be."

In the summer HSBC cut its standard variable mortgage rate by almost one percentage point; the Halifax's new phone bank, Intelligent Finance, launched with a competitive rate; and Barclays switched to a new system of interest calculation cutting monthly bills.

Announcing its interim results, Nationwide, Britain's biggest building society, said its residential mortgage lend ing had been "robust" in what has been a competitive market, and pointed out that its share of new advances of 10.1% was above its existing market share of 8.5%.

Mr Davis said the new figures partly reflected the fact that it is "not a big player" in the remortgage market, and added that he never thought the 15.4% share achieved last year was sustainable.

The society had more to celebrate on the savings front - it captured more than a sixth of all new savings money over the period, more than double its natural share of 6.9%.

More than 150,000 people have taken out the society's online e-Savings account since its launch in June despite it only being available to Nationwide current account holders.

Nationwide's pre-tax profits for the six months were up 15.2% to £253.8m, compared with £220.4m last time.