Lender warns of house price slowdown

29 January 2004
Northern Rock warned yesterday that house price growth would slow during 2004.

The mortgage firm said it would be toughening up its lending policy to first time buyers and working to secure the custom of existing clients in anticipation of the fall off.

Calming nerves, Bob Bennett, the firm's finance director, said there was little danger of an imminent housing market crash.

"We do not believe there will be a house-price crash. We think house-price inflation will go from 10 per cent this year to 4 to 6 per cent by the end of 2004. We think there will be a slowdown," he commented.

Northern Rock announced better-than-expected results yesterday.

The Newcastle-upon-Tyne-based firm said demand for mortgages surged to record levels, as it reported an 18.6 per cent leap in profits.

The UK lender reported full-year pre-tax profits of £386.8 million, compared with £326.2 million a year ago.

Net lending rose 27.1 per cent, to £8.5 billion during the 12 months to December 31st, the company reported.