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Nationwide Building Society Blames £726 Million Hit On Accounting Changes

The Nationwide Building Society has long been one of the main suppliers in the mortgage market but it seems that they have taken a massive hit after the credit crunch caused a major fall in the value of their assets. While the Building Society claim that the £726 million hit on the value of their assets is only a paper loss, there is concern about the quality of some of their investments.

The management of the Society are confident that much of the fall in asset value will be reduced upon maturity of the investments – many of which have some year to go. However, they did admit to taking a £102 million hit on six Structured Investment Vehicles (SIVs) which collapsed as a result of the money markets closing down.

As well as the fall in the value of assets it has also been revealed that total mortgage lending for the last 12 months fell from £11.2 billion to £6.7 billion, a substantial fall but not one which was unexpected. They are very much one of the barometers of the housing market and the sharp fall in the lending figure is somewhat alarming and does not bode well for the short term.

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