Widespread reporting of significant revenue growth nationwide, attributed to a surge in stamp duty transactions.
In the financial year ending March 31, 2025, Nationwide Building Society observed a notable increase in profits, largely attributed to a surge in first-time homebuyers amidst the stamp duty deadline. The mutual served a record 120,000 first-time buyers, surpassing the figure from the previous period by almost double.
This growth in buyers was prompted by Chancellor Rachel Reeves' decision to lower the stamp duty threshold for first-time homebuyers from £425,000 to £300,000, resulting in a nationwide rush to complete purchases before the tax hike. This surge in demand boosted Nationwide's underlying income to £5.2 billion, representing a £500 million increase from the previous year.
Nationwide's profit before tax rose nearly £500 million to £2.3 billion, but the society faced rising costs totaling £3.2 billion, primarily due to its acquisition of Virgin Money last March. The £2.8 billion acquisition, which formed the UK's second-biggest retail banking provider, resulted in costs exceeding £689 million, mainly associated with planned, short-term investments aimed at improving customer experience.
While the acquisition impacted the underlying profitability, Nationwide demonstrated resilience by returning £2.8 billion to customers, outshining many listed banks. The society distributed this value in the form of improved savings and loan rates, as well as rewards, including direct payments under the Fairer Share scheme and The Big Nationwide Thank You.
In a press release, Nationwide's CEO, Debbie Crosbie, expressed optimism about the society's future, recognizing the subdued pace of economic activity but anticipating a gradual improvement. Crosbie expects solid labor market conditions, resilience in real earnings, and lower interest rates to support housing market activity and deposit growth.
Kevin Parry, Nationwide's chairman, praised the acquisition of Virgin Money, citing the benefits of mutuality for more individuals and business customers. Despite the global economic outlook remaining uncertain, UK households and UK-focused businesses are generally well-positioned to handle potential shocks, as per the executive team's assessment.
- The surge in first-time homebuyers, prompted by a lower stamp duty threshold, contributed to a significant boost in Nationwide Building Society's profits, particularly in the realm of real estate and banking.
- The UK's economy might see improvement due to factors such as resilience in real earnings, solid labor market conditions, and lower interest rates, according to Nationwide's CEO Debbie Crosbie's optimistic outlook for the society's future.
- The acquisition of Virgin Money by Nationwide, though incurring significant costs, was met with praise by Kevin Parry, Nationwide's chairman, who saw it as an opportunity to extend mutuality to more individual and business customers, notably in the fields of finance and investing.
