Britain’s biggest building society Nationwide to pump millions into building and rental schemes in bid to ease nation’s housing crisis

Britain’s biggest building society is to pump millions into building and rental schemes in a bid to ease the nation’s housing crisis.

The Mail can reveal how Nationwide is considering a radical overhaul of its traditional savings and loans business to put more people on the property ladder.

It is a considerable departure for a building society, and the first major decision by new boss Joe Garner.

New direction: Nationwide is considering a radical overhaul of its traditional savings and loans business to put more people on the property ladder

He said he wanted to make housing ‘the focal point’ of its business as the society came under fierce criticism for its paltry rates on savings accounts.

A spokesman stressed the lender ‘was not looking to become a house builder’ but chairman David Roberts revealed it was looking at ‘practical ways’ to increase supply.

It is thought this could include pumping millions into building schemes, or taking part in sale and leaseback arrangements, making it a kind of landlord to hundreds of tenants.

It may also finance private rented sector housing schemes, to put it on a par with giant insurers such as Aviva and Legal & General, which are looking to use some of their mountains of cash to invest in housing.

At the society’s annual general meeting yesterday, Roberts told the Mail: ‘We are considering all sorts of things, but we’re looking at the policy angle and practical ways we can influence things.’

Chief executive Garner told society members he wanted Nationwide to be seen as a ‘national treasure’ and a force for good. He added: ‘Housing should be the focal point of our activity, both our business activity and our social investment, so that is why we’re thinking about it.

‘We are asking ourselves the question, “How could we make a bigger, more direct impact in a positive way?”’

Nationwide is already involved in schemes to increase home ownership, not least through its lending activities.

As a building society the mutual is supposed to plough profits back to its members, essentially customers who save and borrow with it. As of 2016/17 it was lending £33.7bn to first-time home buyers and it has vast resources to call on.

It is Britain’s second-biggest mortgage lender, and has lent £171bn on home loans. It also looks after £144.5bn of savers’ money, and has 15m members.

But it has found making good margins on its business increasingly difficult in a low interest rate environment.

Investing in property is considered by many to be a way of generating good yields, as well as helping the wider community.

A spokesman for Nationwide said: ‘It is important to address housing supply and there are a variety of ways that can be done.

‘We are in discussions about how we can help address the current situation.’

Revolt over £3.4m pay

Nationwide boss Joe Garner’s £3.4m pay deal was criticised.

Customers of Britain’s biggest building society said the bumper payouts were too big, despite chairman David Roberts saying that the figures were below industry norms. Chief executive Garner took home £3.4m for the year to April, although this figure included a £1m buy-out award from his old job.

In the 2017/18 financial year, he will be able to earn a maximum of £2.7m.

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