Nationwide today said new mortgage lending dropped by almost half last year as the UK's biggest building society looked to weather the credit storm.
The society lent £6.7 billion on new mortgages in the year to April 4 - 40% below the previous 12 months - although underlying pre-tax profits rose 17% to £781.1 million.
Nationwide funded the lending entirely through retail deposits, which trebled to £9.1 billion as worried customers sought a safe haven for their cash.
The group said its mortgage arrears were less than a third of the industry average as its focus on lower-risk borrowers paid dividends.
But Nationwide also predicted lower house prices this year and added it was "difficult to predict" how long the tough current market conditions would last.