The warning came as the building society posted details of its profits, which have plunged by around 63 percent. Pre-tax profits for the building society were reported to be £117 million for the six months to September, and this compared to £322 million in the same period last year, reflecting a 63 percent drop.

According to reports the rock bottom base rate has resulted in a lower return on borrowing, which has affected the profits of the lender. In addition to this significant falls in commercial property values have also had a detrimental effect on profits, said the building society.

Graham Beale from the Nationwide said that 2010 was likely to bring continued challenges, and he expressed concern over the recovery of the property market in the UK.

Beale predicted that the current base interest rate, which has been at an all time low of just 0.5 percent for eight months, would remain at this level until at least the final quarter of next year.

He added that the recovery of the economy was likely to be slow and drawn out. Commenting on the recovery of the property market he said that house price increases seen recently had been the result of lack of supply, but that property values would be driven down next year due to rising unemployment and other factors.

He stated: ‘Economic recovery is forecast to be slow and we expect interest rates to remain at their current level until at least the fourth quarter of 2010. We are also cautious on future prospects for the housing market. The growth in house prices over recent months appears to be driven by lack of supply, and growth in unemployment throughout 2010 will inevitably exert downward pressure on house prices.’

Nationwide predicts downward spiral for house prices is a post from: Glitec Loans

However, despite this winning headline rate that is being advertised by Nationwide for existing customers those that are interested in these loans will not actually know what rate they will get until they have submitted their application, as the actual rate that they will get will be based on their individual circumstances.

Customers that wish to apply must also have held a FlexAccount for at least three months with at least £750 a month being paid into the account.

It is thought that this new offering from Nationwide has come out at a time when many people may be considering taking out a personal loan to purchase a car, with the new registrations now due out, and the rate beats many of the ones being offered by leading supermarkets and other lenders.

An official from the Nationwide said that its pricing methods were the same as those used by other major lenders, stating: ‘We mainly look at their credit history to see if there are any defaults or penalties.’

There has been concern over recent months that whilst the Bank of England base interest rate has fallen to record levels of just 0.5 percent many lenders have been hiking up rates on loans and mortgages thus making increased profit from consumers.

Over the past two years there is said to have been an increase of 44 percent in rates on loans of £5000 taken over three years.

Existing customers can get competitive loan rate from Nationwide is a post from: Glitec Loans

The Nationwide has launched the 125 percent mortgage recently to try and help struggling customers whose properties are now worth less than the amount that they owe on them. However, the offer will only be available to existing mortgage customers of the lender, and even then not everyone will qualify.

Customers of Nationwide that are in negative equity but need to move house may find that they are eligible for the 125 percent mortgage. These mortgages were once widely available from a wide range of lenders, and were very popular with first time buyers who had little or no money to put towards their first home. However, since the onset of the global credit crunch these mortgages, and even the popular 100 percent mortgages, have disappeared from the shelves.

An official from the lender said that the deal had been launched to help customers that were struggling under specific circumstances. She said: ‘This is for people in a very specific circumstance: Nationwide borrowers in negative equity who want to move home.’

In order to qualify for the mortgage customers will have to undergo stringent affordability tests to see whether they really need the 125 percent mortgage in order to cope financially.

It is thought that many borrowers who took out mortgage loans of 90 percent or more of the property value over 2006 and 2007 may be in negative equity due to the level by which property prices have fallen since their peak in 2007.

Negative equity mortgages being offered to some customers by Nationwide is a post from: Glitec Loans

It will come as a shock to most at first sight- we’ve been trained over the last year to believe that 100% mortgage equals bad, irresponsible lending and one of many reasons we’re in the property pickle we’re in today.

People were allowed, encouraged and even, when property values began to spiral out of control, felt forced to take out mortgages that they clearly couldn’t afford. The best deals lately have been restricted to those with a 40% deposit.

When someone was lent more money than their home worth, they were essentially taking a gamble (as was the lender) that the property prices were simply going to keep rising until their loan to value dropped below 100% and they could get on a better deal.

When property prices suddenly dropped, many were left with more negative equity than they even started with and others with a small deposit were plunged into negative equity and essentially trapped in their property (and with high LTV mortgages dwindling, trapped with their mortgage provider unless they could come up with an additional deposit).

So is this just an example of recovering mortgage lenders getting greedy once again and lending recklessly?

Not really, and here’s why:

This mortgage is only going to be available to current Nationwide customers, not new borrowers and NOT first time buyers.

Effectively, people who already are saddled with a 125% mortgage due to negative equity. These people have already been lent the money, so not to lend to them now would be a little like closing the door after the horse had bolted. This is a way for Nationwide customers to be able to move house even while in negative equity.

The deal does come at a price though – customers can still only borrow up to 95% of the value of the new property.

Here are the rates: On the three year deal, 6.73% interest is payable on the first 95% of the loan, and 7.23% on the negative equity carried over from the previous property.

On the five year deal, it is a hefty 7.48% on the first 95% and 7.98% on the negative equity.

So, not cheap by any means. When taken into account that the rates from which lenders make up their fixed rate deals are around the 3% mark and the fact that Nationwide’s standard variable rate is just 2.5%, it’s very clear that staying put and overpaying where possible in order to take advantage of the low interest rate is still the best bet.

However for some people who have to move due to work or with a growing family etc., this deal will come as a lifeline. Maybe now other lenders will follow suit to help out their customers who now, thanks to their low deposits being accepted back during the housing boom, find themselves stuck in an unsuitable property.

125% Mortgage – Nationwide’s Boost To Those In Negative Equity is a post from: Glitec Loans

The merger with Nationwide is part of a package that was announced recently by the Bank of England, and over five hundred employees of Dunfermline will now be transferred over to the Nationwide.

Many branches, assets, and prime mortgage loans have been taken over by Nationwide, and building society officials have said that it will be business as usual for the customers of Dunfermline.

The Prime Minister, Gordon Brown, said that Dunfermline was ‘author of its own mistakes’ when the level of debt was revealed. He said: ‘Let’s face facts. The Dunfermline building society is the author of its own mistakes: mistaken judgments, mistaken investments, mistaken policies. We have had to step in where the Dunfermline building society has failed, and we have stepped in in such a way that we can protect both the savers and give those people who depend on the building society for mortgages a way through for the future.’

The chairman of Dunfermline said that he was pleased with the fact that the building society was being saved but was disappointed that it did not get the government support that would have allowed it to remain as an independent operation.

He said: ‘I am hearing encouraging noises – yet to be confirmed – that Nationwide will do all they can to keep as much employment as they can in Scotland. I and my board have worked tirelessly to protect the members and the staff and we have no reason to feel bad about this. We are deeply disappointed with the Government’s decision. It was unnecessary. But nevertheless we need to move on and we need to work with the new owners.’

Nationwide takes over Dunfermline Building Society is a post from: Glitec Loans

Some of the banks announced their decisions the day after the interest rate cut was announced, and the move was welcomed by the Prime Minister, Gordon Brown, who stated: “Yesterday, we saw decisive action on interest rates from the Bank of England and the European Central Bank, and I welcome the fact that a number of British banks have now decided to pass on the interest rate cut to customers, to families and to businesses.”

A number of major lenders have decided to reduce their interest rates in response to the base rate cut, and one of these is Nationwide, which has said that its borrowers could find themselves significantly better off in terms of their finances following the rate cut.

One official from the building society stated: “This is the right and fair course of action for Nationwide to take for all our borrowers at what is a very challenging time for everyone in the UK.”

The CML has said that each lender will have to make an individual commercial decision with regards to how much of the cut to pass one. An official from the CML said: “The problem banks have got is that they have limited funds and don’t have enough money to give to all the customers who may want them. I think over the next few days and weeks we will see that the banks and building societies will move by anywhere between 0.5% and 1.5% – the individual decisions will be on the basis of assessing what they want for their savers as much as what they want for their borrowers.”

Lenders say they will pass on base rate cut is a post from: Glitec Loans

The Bank of England recently cut the base rate by 0.5% in a surprise move a day ahead of the scheduled Monetary Policy Committee meeting in October, hoping that the rate cut would help to boost the ailing economy and revive consumer confidence. A number of other lenders promised that they would be passing on the full 0.5% cut from November, but some have failed to pass on the full rate cut.

Nationwide officials have also said that new customers looking for an SVR mortgage will now have to deal directly with the lender rather than going through an intermediary such as a broker. They also said that new customers will have to put down a deposit of at least 25%, which could cause problems for first time buyers and those with little or nothing in the way of equity or savings to put down.

An official from Nationwide said that the building society was committed to providing “fair, affordable and sustainable mortgages”.

Amongst the other lenders that are passing on the full rate cut are Halifax, Lloyds TSB, the Woolwich, First Direct, Royal Bank of Scotland and NatWest. HSBC is leaving rates unchanged and Northern Rock will only be passing on a 0.15% cut.

Nationwide passes on some of interest rate cut is a post from: Glitec Loans

For the previous financial year Nationwide appears to have enjoyed healthy mortgage lending levels, which amounted to around £11.2 billion, and resulted in the lender taking an eleven percent share of the mortgage market. However, for the financial year leading to 4th April, mortgage lending levels for the Nationwide plummeted to £6.7 billion, and its share of the mortgage market went down to just over seven percent.

Many other lenders have also seen their mortgage lending levels fall, and the Council of Mortgage Lenders has recently stated that mortgage lending levels continue to be subdued. However, April did see a slight rise in overall mortgage lending according to a recent report. An official from the Nationwide said that the effects of the global credit crunch were likely to continue over the course of this year and possibly into next, with house prices also continuing to fall over the course of the year.

He added: “The society is conscious of the difficulties faced by consumers in these disrupted market conditions and we are playing our part to help by continuing to focus on offering mortgages that meet the needs of both existing members and first-time homebuyers.”

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Drop in mortgage lending levels for Nationwide is a post from: Glitec Loans

One recent example was the Nationwide building society, which hiked up the interest rates on its unsecured personal loans recently. This took the interest rate on some of its personal loans to a higher level than the interest rate on its credit card. Tighter lending conditions and increased wariness amongst lenders have resulted in an increase in interest rates on personal loans, as well as other forms of borrowing, leaving the consumer with some very tough choices to make.

One industry official stated: ‘It’s not only mortgage rates that continue to increase, so too have the rates and monthly repayments on personal loans.’

Consumers are also reminded that whilst most lenders advertise a typical APR on their unsecured personal loans, this is not necessarily the rate that each consumer will get, as the actual interest rate will depend on various factors including the credit rating and history of the applicant.

Now is the time for consumers to not only shop around for personal unsecured loans in order to try and get the best rate of interest, but also to ensure that they check all of their finance options in order to determine whether a personal loan is the most effective and affordable solution to their financial needs.

Recent additions:

•  Nationwide asks for larger deposits from borrowers
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Hikes in personal loan rates may mean credit cards are more viable option is a post from: Glitec Loans

However, over recent months both 125% and 100% mortgages have been taken off the market, and an increasing number of lenders are even restricting access to the traditional 95% mortgage by demanding a higher deposit from borrowers. The Nationwide has recently stated that it will want at least a 10% deposit from borrowers on all but two of its products, and this could pose a real problem for some borrowers, particularly first time buyers with little in the way of savings.

An official from the building society stated: “These changes will allow us to maintain control of the volume of business the society is attracting, while enabling us to continue offering our full range of mortgages to our existing members in a controlled and prudent way.” Industry official said that moves such as this were making things tough for consumers, with one official stating: “The biggest struggle now is not being able to afford a mortgage – it is being able to get one. Availability is the biggest hurdle despite all the Government efforts to get lenders lending.”

He added: “First-time buyers and people renegotiating their mortgage for the first time will be worst affected. When disposable income is already at breaking point for many, it is frankly impossible to see how those with limited savings will find a way to get a foothold on the property ladder.”

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Nationwide asks for larger deposits from borrowers is a post from: Glitec Loans