Nationwide, the UK’s largest building society, reported an increase in profit in the first three months of its financial year despite a sharp decline in mortgage lending.
The mutual said gross mortgage lending had reduced from £26bn to £24bn, while net residential mortgage lending was down from £8.2bn to £3.9bn for the nine months to December 31 2017.
It said the decline reflected lower gross mortgage advances and increased prime mortgage redemptions due to market competition. Net lending for prime mortgages during the quarter was £3bn lower than last year at £4.3bn, and for specialist mortgages there was a net redemption of £0.4bn compared to net lending of £0.9bn in the same period last year.
Nationwide Building Society chief executive Joe Garner said predicted a strong end to the year, despite the recent slump.
"As we anticipated, a subdued buy to let mortgage market, plus sustained competition, slowed the pace of growth in our mortgage book," he said. "With third quarter mortgage reservations significantly stronger than for the same period last year, we expect a strong final quarter for our gross lending."
"Supporting the financial lives of our members is a founding purpose of our building society. We also aim to play our part in helping to solve Britain's housing shortage, in line with our founding principles and our expertise.
"We've launched a range of initiatives to support both renters and buyers, including most recently a commitment to build around 250 homes as part of an innovative, sustainable housing development in Swindon, just three miles from our head office."
Nationwide, which has competed for new current account customers by offering 5 per cent interest in the first year as well as loyalty deals, said it had increased current accounts by £2.7bn, including balances from 617,000 new current account holders.
The mutual attracted nearly 20 per cent of everyone switching their current account in the period and now has 7.8 per cent of the current account market, up from 7.5 per cent last February. Underlying profit for the mutual increased to £883m from £866m for the first nine months of the previous financial year.
Statutory profit was £886m, down from £946m in the same quarter last year.
The building society's net interest margin - the difference between interest income received and interest paid out - remained at 1.33 per cent as lower funding costs were offset by a decrease in average mortgage margins due to "sustained competition" in the market.
Mr Garner said: "Looking ahead, we expect the economy to continue to grow but only modestly. Consumer spending, which has been a key driver of growth, has slowed noticeably, and almost three quarters of those surveyed in our Brexit Consumer Panel expressed concern about the rising cost of goods and services.
"Modest economic growth is also likely to hold back the housing market and house price growth. Overall, we expect house prices to be broadly flat in 2018 with perhaps a marginal gain of around 1 per cent.
"We expect competition in the mortgage market to continue and we will prioritise quality over volumes in the long-term interests of our members."
