Home loans build Britannia record

BRITAIN'S second-largest building society today raised its payout to members by 33% after uncorking record profits despite the slowing housing market.

Britannia's 800,000 eligible members will pocket an average of £52 as the mutual shares a slice of its cash with savers who have been with the business for more than two years.

Figures today showed lending in the 12 months to December surged 28% to £6.3bn while operating profit rose to an all-time high of £140.4m, up from £134.3m. Assets under management topped £25bn.

Chief executive Neville Richardson said: 'These results show it is possible to thrive in a highly competitive market while maintaining a prudent lending approach. This ensures borrowers are less likely to suffer in the event of a change in the economic picture and that the society is protected against the worst effects of a housing market downturn.'

Britannia's share of the new-mortgage market has been growing fast despite the bulk of its home loans going to those with multiples of 3.5 times salary or less.

Richardson said this helped minimise the risk of bad debt. Group arrears over the last 12 months were less than £1m.

Britannia said it expected a soft landing in the property market with a period of 'low or no growth' in prices.