Britannia sees house market slowing

LONDON (Reuters) - Britannia, Britain's second biggest building society, sees little or no growth in the mortgage market this year as higher interest rates and personal debt feed through to the housing market, it said on Tuesday.

Chief Executive Neville Richardson also said he would consider more acquisitions after its biggest ever purchase helped it post an 8 percent rise in profit last year.

"The (mortgage) market has had a very good run for a long period of time and I think it's likely to be less buoyant, but I'm not talking about it being off a cliff," Richardson told Reuters in a telephone interview.

"I would expect the market to be pretty flat this year, in the 0 to 5 percent area," he said.

Mortgage lending in rose to 346 billion pounds last year, up 20 percent from 2005, according to the Council of Mortgage Lenders.

Competition among lenders was also intensifying, Richardson said.

Britannia reported a record profit of 130.4 million pounds for 2006, up from 120.5 million in 2005.

The society, which has 3 million members, held near its traditional 2 percent share of the mortgage market with gross lending of 8.4 billion pounds, up 22 percent on the year, and net lending of 2.3 billion pounds.

Earnings were boosted after Britannia increased in size by a third with its purchase of Bristol & West's savings book and branches in 2005, and Richardson said the lender could look at more deals.