Nationwide has recorded a significant drop in buy-to-let lending as government measures to clampdown on landlords start to have an impact on the UK’s biggest building society.
Buy-to-let lending at Nationwide plunged to £900m in the nine months to the end of December, from £2.2bn a year ago, owed largely to the fact that the mutual has had no alternative but to tighten lending criteria in the wake of the stricter tax regime on buy-to-let landlords unveiled by the Bank of England last year.
“We have seen the buy-to-let market cool, to some degree,” said Mark Rennison, Nationwide’s finance director. “It’s a smaller market today than it was a year ago, quite a bit smaller probably in London and the south east. I don’t think it’s a short-term effect.”
The major fall in buy-to-let lending has taken its toll on the building society’s pre-tax profits which have dropped by 16% to £946m, the latest figures show.