Nationwide Building Society reveals lower earnings over the past year

The lender said the decline was largely due to the £344m handed out to members in June last year, as well as it passing on interest rate rises to savers.

On Thursday, it also announced it will pay out another bonus to eligible members in June this year, amounting to about £385m in total.

The society, like rival high street banks, said that the benefits of higher interest rates were largely offset by a fiercely competitive mortgage market throughout the year.

It also said the housing market has remained subdued in the face of higher borrowing costs.

Chris Rhodes, Nationwide’s finance chief, revealed that the mortgage market was down about 27 per cent over the latest year, with buy-to-let lending plunging nearly 50 per cent.

“As we look forward, we do expect the market to gradually improve, both as affordability improves from falling interest rates, and with wage inflation running ahead of CPI (Consumer Prices Index) inflation,” he said.

“But it is going to be gradual, and as we look at house price data it is going to be a bit lumpy.”

According to the lender’s own forecasts, house prices could decline by 1.1 per cent between December 2023 and December 2024.

Debbie Crosbie, Nationwide’s chief executive, said that consumers have been more resilient than previously expected.