Fewer mortgage deals are being signed at Nationwide as the housing market continues to slump.
Mortgage lending volumes at Nationwide fell by almost 17 percent during the six months to the end of September. The building society said gross lending to homebuyers fell to £10.9 billion over the period, while lending for new mortgages dropped to £1 billion, compared to £3.6 billion in the same period last year.
The release of the figures comes as Nationwide's chief executive Graham Beale is predicting further falls in house prices over the coming year and possibly into 2010. The building society's latest house price index shows that property values fell by 2.2 percent in October.
As a result of price declines and the ongoing credit crunch, consumers are losing confidence in the housing market and activity remains subdued, the lender pointed out.
Despite the difficult conditions, Nationwide said its pre-tax profits for the six months to September had increased by 11 percent to £374 million. But underlying pre-tax profits dropped 18 percent to £322 million due to the cost of funding on the wholesale money markets.
Nationwide was one of several mortgage lenders to reduce their loan rates by the full 1.5 percent announced by the Bank of England last week. Halifax Bank of Scotland, Lloyds TSB, NatWest, Royal Bank of Scotland and Abbey have also confirmed their intention to cut borrowing rates.
