Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Newcastle Building Society Mortgage Lending Rises 9% to £623m in H1 2026

Newcastle Building Society reported a 9% increase in gross mortgage lending to £623 million for the first half of 2026, up from £570 million a year earlier. The mutual also saw improved customer retention, with 80% of mortgage maturities retained during the period, compared to 64% in the same period last year.

Net core residential lending reached £289 million for the six months to 30 June 2026, up from £156 million a year earlier. Total mortgage balances increased by £235 million to £5.9 billion. Gross lending returned to levels broadly in line with those achieved in 2024.

The mutual reported that compressed margins affected growth, with net interest income falling from £51 million to £48.3 million and the net interest margin reducing from 1.57% to 1.35%. Underlying operating profit also fell from £15.9 million to £14.9 million, attributed to reduced net interest income due to pressured mortgage margins.

At the end of June, the proportion of mortgages more than three months in arrears stood at 0.8%, and the society held 19 properties in possession across its mortgage book. Newcastle Building Society recorded a £0.7 million impairment charge against loans and advances, compared with no charge a year earlier. The mutual stated this reflected a more cautious economic outlook and updated macroeconomic assumptions, rather than a deterioration in borrower performance.

The society has become more cautious about house price growth expectations, with its weighted economic scenario assuming UK house prices will fall by 0.8% in 2026 and 1.8% in 2027 before returning to growth in 2028.

Forbearance activity increased, with support measures granted to 250 residential mortgage borrowers during the period, compared to 154 at the end of 2025. Balances covered by forbearance rose to £42 million from £27.4 million.

Newcastle Building Society’s mortgage portfolio was predominantly residential, with prime residential lending accounting for £5.3 billion of balances and buy to let (BTL) representing £353 million. Around 9.3% of the residential portfolio had loan-to-value (LTV) ratios above 90% at the end of June, up from 7.2% a year earlier.