Coventry Building Society today announced record levels of new mortgage lending.
The UK’s fifth largest building society saw new loans soar by 77% during the first half of the year, with around 40% of the total coming from people moving their mortgages from other lenders.
During the six months to the end of June, the society lent £861m, more than twice the amount it would expect given its size.
Once redemptions and repayments had been taken into account, the mutual society saw its mortgage book grow by 125%, or £486m, compared to an increase of £216m in 2000.
Chief executive Martin Ritchley said that the society’s decision in 1996 to offer a “privilege rate” to borrowers who had been with it for five years or more had also helped it to retain existing borrowers.
During the first six months of the year, the society reduced its interest margin, the difference between the rate it charges borrowers and the one it gives savers, to 1.09% from 1.22%.
Ritchley said that members had benefited from the group’s mutual status to the tune of around £15m in the first half of the year, bringing the total to £130m since 1996 when it introduced its “privilege rate”.
The amount of savings people paid into the society more than doubled during the first six months, with £324m deposited, up from £153m in the same period the previous year.
Pretax profits rose 3.2% to £19.1m from £18.5m, boosted by the society’s alliance with Norwich Union, under which the insurance and pensions group sells its product’s through Coventry’s branches.
EGi News 21/08/01
