LLOY, NBS, NWG: Should you hold these mortgage lenders?

Highlights

• An estimated 38% of homebuyers have lost out on an agreed property deal because of mortgage delays.
• Bank of England has stated that unsecured lending to consumers rose last month at the fastest pace in almost five years due to the sharp rise in the cost of living.

Despite growing evidence that the UK property market is recovering, with soaring average home prices, almost four in ten (38%) of homebuyers have lost out on an agreed property deal because of mortgage delays, a new survey has revealed.

According to Butterfield Mortgages, around 52% of Britons surveyed revealed that the process of securing a mortgage in the UK is too slow, which is increasingly creating complications for property buyers. Around 69% of homebuyers consider the process of securing finance as a stressful experience, and 31% have lost their deposit due to delay in getting a mortgage.

Most homebuyers also want more flexibility from lenders, with around 59% of the view that the process of assessing applicants’ eligibility to take a mortgage is too rigorous and strict. Also, 48% of the borrowers revealed that after the loan has been disbursed, lenders do not offer adequate support.

The survey result has come after the Bank of England on Tuesday revealed that unsecured lending to consumers rose last month at the fastest pace in almost five years due to the sharp rise in the cost of living.

The new mortgage approvals fell from 73,800 in January to 71,000 in February due to the strict process of assessing applications.

Let us explore some FTSE-listed mortgage lenders’ performance.

Lloyds Banking Group Plc (LON: LLOY)

Lloyds Banking Group Plc is a multinational financial service company that provides its financial products and services to retail and commercial clients. The bank has revealed that its number of mobile app users has increased by 27% and number of online banking customers have risen by 12% during the pandemic.

The bank’s pre-tax profit stood at £6.9 billion in FY2021, up from £1.2 billion in the previous year, driven by higher income and a net impairment credit. Its net income increased by 9% to £15.8 billion. The bank booked a £1.2 billion credit from provisions for bad debts and benefitted from an increase of £16 billion in mortgaged demand to £293.4 billion.

With a market cap of £35,086.56 million as of 30 March 2022, the FTSE 100-listed high street bank saw an appreciation in its share price of 15.60% over the last one year. Lloyds Banking Group Plc was trading at GBX 48.87, down by 2.27% on 30 March 2022 at 10:42 AM GMT.

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Nationwide Building Society (LON: NBS)

Nationwide Building Society is one of the leading British financial services and insurance company. It is the largest building society in the world, with a market cap of £1,852.49 million as of 30 March 2022.

The building society has recently announced the appointment of Alan Keir as an Independent Non-Executive Director, who was group Managing Director and CEO of EMEA at HSBC.

The Main market-listed financial institution saw a modest decline in its share price of 1.40% over the last one year. Nationwide Building Society’s shares were trading flat at GBX175.50 on 30 March 2022 at 10:50 AM GMT.

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NatWest Group Plc (LON: NWG)

NatWest Group Plc is a banking and insurance holding company, with a market cap of £23,964.70 million as of 29 March 2022. Recently, the banking group announced plans for an off-market purchase of its 549,851,147 ordinary shares worth £1.2 billion from the UK government to return to majority private ownership. The purchase of a 4.91% stake will take the government stake below 50%. The deal will be completed on 30 March.

The FTSE 100-listed Royal Bank of Scotland’s holding bank saw an appreciation in its share price of 16.79% over the last one year. NatWest Group Plc’s shares were trading at GBX221.40 on 30 March 2022 at 10:55 AM GMT.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.