Unhappy customers are deserting rip-off high street banks in droves in search of better deals, says the country's biggest building society.

Nationwide, whose annual results underlined the slowdown in the housing market, gained 875,000 new members last year and signed them up at the rate of nearly 2,500 a day.

The fall off in mortgages was more than offset by gains in the field of loans, credit cards and current accounts, the Swindon-based mutual said.

Members benefited by an estimated £ 644 million through better interest rates and lower charges.

Total member value, which takes into account pricing benefits and retained profit, rose to just more than £1 billion from £906 million the previous year.

"These results provide clear evidence that more and more people are defecting from the banks and choosing to do business with Nationwide because we give them a better deal," chief executive Philip Williamson said.

"This is testimony to the fact that with no shareholders to worry about, we genuinely put our members at the heart of everything we do." Nationwide said it expected to see further falls in home loans in the current year as the housing slowdown continues.

It is predicting house-price inflation of not more than two per cent, but stressed it was not expecting a crash.

"Our view remains that the market is experiencing a soft landing rather than a collapse," commercial director Stuart Bernau said.

Prospects of further rise in interest rates seem to have dimmed in recent weeks.

New mortgage lending slowed in the year to April 4, but growth in other areas helped boost profits by 21 per cent to £517. million.

Net mortgage lending fell to £ 10 . 9 billion against £13.2 billion last time. This would fall further this year as significantly lower levels of equity were unlocked from properties.

However, profits from mortgages taken out in previous years helped boost the business. During the year, residential mortgage balances increased by 16 per cent to £78.2 billion. The number of current accounts held with the building society rose by 17 per cent to 3.2 million, while there was a 22 per cent hike in credit card accounts to 796,000.