Nationwide 'stops lending' on some properties and other banks could follow

Nationwide has stopped lending on some flood-risk properties. And experts warned other banks may follow suit after UK weather-related claims on home insurance reached a new high after a drab and dreary winter and autumn period.

Nationwide’s head of property risk, Rob Stevens, said the lender used mapping technology to identify which homes were vulnerable to flooding. Mr Stevens explained Nationwide, the UK's largest building society, would decline to grant a mortgage to buy a property it deemed to be at high risk.

Mr Stevens told the Guardian that “there will be rare occasions where we are unable to lend due to the associated risk of lending on a specific property”. Nationwide said it needed to lend responsibly and therefore there would be some properties it could not grant mortgages on.

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Nationwide said: "Albeit when it comes to flooding, this is only on a very limited number”. Bloomberg reported Stevens saying that: "If we’re doing a 40-year mortgage term and there’s something there that I know could fundamentally change for the customer, I can’t not know that”."

"In the overwhelming majority of cases” it was able to lend on homes even where issues had been identified he added. Last year, Matt Hammerstein, formerly chief executive of Barclays UK and now head of its UK corporate bank, said: “Barclays does not have a policy that restricts the availability of mortgages to borrowers in flood-risk areas – we lend irrespective of the flood-risk band.”

NatWest last year told MPs that “we do not exclude lending in any flood-risk areas”. NatWest’s agricultural team are offering individual financial solutions to any customers impacted, with financial support available for those hit by the adverse weather conditions both in the short, medium and the long-term.

Ian Burrow, Head of Agriculture at NatWest Group, said: “We are here to support our customers in the farming sector through this difficult period. Our agricultural managers have in-depth knowledge of the sector, including being able to offer the individual financial support, where needed, to help customers navigate the recent flooding. We would urge affected customers to get in touch with their local agriculture relationship manager to discuss how we can help."

“As always, we are also here to support our customers in the long-term. The disruption caused by the flooding has the potential to significantly impact planting and crop rotations. This is why we encourage customers to discuss the impact on their own individual business with their manager to establish if it might be appropriate to consider altering the bank facilities currently in place.”