KENT Reliance is celebrating its official status as the nation’s fastest growing building society for the second year in a row by picking up a top award.

KPMG, the accounting and management group, confirmed that the Chatham-based society, just named Best Regional Lender by Mortgage Advisor magazine, increased its assets by 37 per cent to £838m in 2003-2004.

The UK building society sector recorded its strongest growth for seven years, KPMG said. A14.6 per cent increase in assets took total building society sector holdings past the £200bn mark to £224.8bn.

KPMG compiled The Building Societies Database, now in its 14th edition, from building society accounts for year ends between August 2003 and April 2004. Since then, Kent Reliance assets have risen to more than £950m.

Award judges said: “Kent Reliance is a regional lender without rival that is starting to offer its highly competitive products nationwide.”

Chief executive Mike Lazenby was delighted with the award, its fifth in the past year. He said: “This demonstrates clearly that Kent Reliance is a force to be reckoned with, not only in our Kentish heartland but nationally.

“We offer sound financial products at consistently competitive rates with no compromise on service to members. We are going from strength to strength.”

David Forge, KPMG Partner for Kent, praised the building society sector for its achievements: "Not only does this mark a sound performance for the building society sector in very competitive mortgage and savings markets, but it is also a continuing outstanding performance for the Kent Reliance group.”

“It proves that growth and profitability are not always strongest among the larger societies."

The Portman Building Society was the second fastest growing, up 37 per cent. But about half of this increase was due to its merger in December 2003 with the Staffordshire Building Society.

Other societies achieving high levels of asset growth were the Swansea (25 per cent), Dudley (21 per cent), Newcastle (19 per cent), Manchester (18 per cent) and Chelsea (18 per cent).

Nationwide Building Society again powered the sector’s growth. With assets of more than £100bn, it represents 45 per cent of the entire sector.

Nationwide achieved asset growth of nearly 19 per cent in 2003/04, up from 15 per cent the previous year.

The UK's smallest building society remains the Edinburgh-based Century Building Society, with assets of just £17.6m.

Competitive market conditions contributed to a fall in the average net interest margin at two-thirds of societies.

The average margin for the top 19 societies was 1.10%, down from 1.15% last year -- lower than the margins of most other mortgage lenders.

The impact of this on profitability was offset, however, by close control of costs.

Nearly seven out of 10 societies reduced their management expense ratios. Amongst the top 19 societies, the average cost per £100 of assets managed is 85p, down from 90p last year.

As a result, nearly 60 per of societies recorded increased profits in the year 2003/04. Market share of total mortgages outstanding remained at around 18 per cent.