Santander mortgage lending falls by £1bn

Santander mortgage lending falls by £1bn

Santander's net mortgage lending was more than £1bn lower in 2016 after its decision to focus on customer service.

The bank said it saw "strong inflows" in net mortgage lending during the year, driven by buy-to-let demand and lower redemptions, but this was offset by "management pricing actions" which hit its mortgage approvals.

During 2016 Santander saw net mortgage lending of £1.5bn compared with the £2.7bn it saw in the previous year.

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In its quarterly management statement, published this morning, Santander said: "We expect our net mortgage lending to be broadly in line with the market [in 2017] as we continue to focus on customer service in what remains a highly competitive market."

Santander completed 12,400 buy-to-let mortgages during 2016, representing 9 per cent of the value of its new business flow, with a spike ahead of new stamp duty rules in April.

It said it was looking to build its buy-to-let book by focusing on non-professional landlords because they are "closely aligned with residential mortgages" and account for the majority of the volume in the buy-to-let market.

Overall profits at Santander increased to £1.9bn during 2016, from £1.3bn in the previous year, because of "solid income growth, strong cost discipline and lower conduct costs".

Provisions for liabilities decreased by 48 per cent during 2016, which Santander said was mainly due to lower PPI costs.

Nathan Bostock, chief executive of Santander, said: "We saw net lending growth across all three customer business segments, increased cost discipline and continued good credit quality - all supported by robust UK economic growth.

"We also continued to see the benefits of our innovative approach to enhancing our customers' experience, with significant improvements to core digital services throughout the course of the year giving us one integrated platform which will allow us to understand and meet our customers' needs better.

"Looking ahead, we expect to see a changeable and more challenging macro environment in 2017. We believe the transformation we have made in putting the customer at the heart of our business, coupled with a continued focus on costs and risk management, gives us solid foundations to succeed and confidence in the future."