Coventry boosts market share

The Coventry said its mortgage lending has soared to three times its normal market share as borrowers opted to stay with the society rather than move to other lenders.

The UK's fourth largest building society said there had been a "considerable reduction" in the number of people redeeming their mortgages during the first six months of the year as the problems caused by the credit crunch put people off switching providers.

As a result, despite the total value of mortgage advances rising by just 1% to £1.91 billion during the period, net lending, which strips out redemptions and repayments, soared by 24% to £851 million.

Net lending during the period was three times the group's normal market share, at nearly 3% across all lenders and around 25% among building societies.

The Coventry also attracted high levels of savings, with money deposited by consumers rising by 9% during the period to reach £905 million at the end of June.

It claimed the level, which was 32% higher than a year ago, was well above its natural market share.

The rise provided further evidence of consumers' preference for mutuals following the collapse of Northern Rock last year.

Figures from the Building Societies Association have shown the sector enjoying record savings inflows during the past year due to people's perception that mutuals provide a safer home for their money.

The Coventry admitted the current climate was "tough" for mortgage lenders, but said its ability to attract and retain savings deposits, as well as its focus on low-risk lending, had enabled it to meet the challenges.

It said it had long been its strategy to fund its mortgage lending through savings balances, and it had developed a range of savings products to enable it to grow its mortgage book in this way.

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