Announcing its annual results for the year to November 30 2011, Hinckley & Rugby said mortgage advances totalled £77 million, up from £35 million in the previous 12 months – a rise of 120%.
Mortgage applications also more than doubled, up from £48 million in 2010 to £90 million in the past year. That rise meant the pipeline of business carried forward into 2012 was £28 million, compared to £15 million a year before.
Hinckley & Rugby remained profitable against a backdrop of heightened tension in financial funding markets and a squeeze in household incomes and consumer spending, said chief executive Chris White.
“These factors affecting the supply of money and people’s appetite for taking major financial decisions such as house purchase meant activity in the wider mortgage market has been very subdued,” he said.
“However, the society has grown market share by prime residential mortgage lending, principally funded from the retail markets. There has been an increase in the net interest margin and in total income, plus improved capital ratios with careful management of costs.”
The mortgage lending included a modest amount of buy-to-let business at low loan-to-value ratios. At the year-end buy-to-let mortgages totalled 6% of the society’s total mortgage book.
First-time buyers have also been attracted, as the society advanced residential loans at up to 90% LTV.
All lending in excess of 80% LTV is backed by mortgage indemnity insurance at the society’s cost.
The society’s 146th annual report and accounts show a small reduction in the size of its savings balances and total mortgage book (£423 million, down from £429 million). Chris White said: “This reflects the wider trend of borrowers paying down their debts as the number of transactions remains stagnant.”
Arrears remain negligible, with just one case of a borrower in arrears for 12 months or more – the same position as at the end of 2010.
