Coventry Building Society’s mortgage lending business benefited from a shift towards remortgaging, according to its results.
The building society’s profits before tax increased by 2 per cent to £112.4m in the six months ending in June.
Its savings balances grew by 11 per cent over the year, with balances increasing by £1.9bn in the first half of the year.
Net mortgage lending was £1.6bn, with a market share for the five months to May of more than 10 per cent.
Mark Parsons, chief executive of Coventry Building Society, said: “The mortgage market in the first half of 2017 has been markedly different from 12 months ago, when we saw significant volumes of property purchases in the buy to let sector ahead of changes to stamp duty.
“It has, though, continued to see a resurgence in remortgages as more homeowners and landlords seek to take advantage of current borrowing rates.
“Our strong product and service offering has allowed us to benefit from this shift, and as a result over the last year we have grown our mortgage balances by 10 per cent.
“In the first five months of 2017 our mortgage balances grew over four times faster than the market growth rate, further increasing our share of the UK market.”
But the building society said its net interest margin fell to 0.99 per cent, which it attributed to “increased competition” for mortgage business putting pressure on new business margins.
Coventry predicted that the Bank of England’s base rate would rise slowly over an extended number of years.
It added that its “prudent” lending policy and low-risk mortgage book insulates it from risks such as falling house prices or borrowers with payment difficulties because of the rising cost of living.
damian.fantato@ft.com
