NatWest has reported a significant decline in its mortgage lending, with a nearly 50% drop in the first quarter of 2023. The strategic decision to withdraw from the competitive mortgage market led to a decrease in new mortgage lending from £9.9 billion in 2022 to £5.2 billion in 2023. NatWest emphasized its focus on profitability amidst reduced demand and a surge in mortgage applications.
NatWest Group experienced a 27% decline in operating pre-tax profit to £1.3 billion in the first three months of the year, impacted by the competitive landscape for savings and mortgage rates. Total income fell by 10% due to increased customer preference for higher-return savings accounts. Despite these challenges, the group witnessed a £2 billion increase in customer deposits and £1.4 billion growth in total lending, reflecting confidence and activity among customers. Low levels of loan defaults continue to demonstrate the resilience of NatWest’s diversified business.
Nationwide Building Society led the industry in current account switching gains during the final quarter of 2023, according to data from the Current Account Switch Service (Cass). The society secured a net increase of 163,363 full account switches, followed by Barclays with 12,823 and Lloyds Bank with 5,800. Conversely, NatWest experienced the most significant losses at 43,182, while RBS lost 11,621 and Halifax lost 41,144 accounts. Industry experts attribute Nationwide’s success to its £200 switching incentive offered in the autumn of 2023. Despite a recent decline in cash-to-switch offers, Cass reported a total of 10.6 million account switches since its inception in 2013.
Nationwide Building Society, Barclays, and Lloyds Bank have emerged as the top gainers from customer account switches facilitated by the Current Account Switch Service (Cass) in the final quarter of 2023. Industry figures indicate that Nationwide secured the most significant net gains, with 163,363 full account switches. Barclays and Lloyds Bank followed closely with net gains of 12,823 and 5,800, respectively. On the other end of the spectrum, NatWest, RBS, Halifax, and Santander experienced substantial switching losses.
Multiple lenders, including Barclays, NatWest, HSBC, The Co-Operative Bank, and Accord, have announced increases in their mortgage rates. These hikes follow an upward trend in swap rates, which underpin fixed-rate mortgages. Experts predict further rate increases, impacting both new borrowers and those nearing the end of fixed-rate deals. The average two-year fixed residential mortgage rate has slightly decreased, while the average five-year rate remains stable. Despite the dip in the two-year rate, monthly repayments have significantly increased compared to two years ago due to higher interest rates.
