"High levels of borrower refinancing translated into lower mortgage income"
Newcastle reported that its annual mortgage lending hit a record high of £575m, an increase of £415m on 2018.
Skipton's gross mortgage lending was up 13.1% to £4.9bn, with mortgage balances growing by 10.3% since the end of 2018. Despite this, its mortgages and savings division reported an underlying profit before tax of £103.9m, down from £113.2m in 2018, which it attributed to "intense competition in the mortgage market".
Leeds Building Society's gross mortgage lending dipped from £3.8bn in 2018 to £3.5bn. However, it delivered net mortgage lending of almost £1bn, with residential mortgage balances increasing by 6.1% to £16.7bn - almost twice the rate of the rest of the market (3.1%).
David Cutter, Skipton’s group chief executive, commented: “This is a solid and balanced performance which has seen us increase our membership and increase our mortgage and our savings balances at rates above our natural market share, despite a subdued housing market and highly competitive mortgage market."
Richard Fearon, CEO of Leeds BS, added: "High levels of borrower refinancing translated into lower mortgage income, without an equivalent reduction in funding costs, and has suppressed net interest income.
“In addition, under International Financial Reporting Standards (IFRS), we have booked a fair value measurement reduction of £19.7m, which includes the effect of market rate volatility on both our legacy equity release portfolio and other mortgage assets. This is an accounting adjustment which will typically unwind in future periods.
“Our successful business strategy includes a focus on product innovation, particularly for customer groups not well served by the wider market, supporting borrowers such as later life homeowners and first-time buyers. In 2019 we helped more than 10,000 members into their first home, and we’re constantly seeking ways to deliver better service, whether that’s in branch, over the phone or online.”
