From May 16, the company will reduce the rates on its 2-year and 5-year fixed rate mortgages. House purchases will be down 5.95% from the previous figure of 6.10%.

The announcement comes as figures for mortgage lending record a sharp drop in the first quarter among first time buyers and existing home owners.

Figures released by Council of Mortgage lenders [CML] show that mortgage lending from January to March hit a low 142,000, only marginally above a 140,000 total,  recorded in the first quarter of 1975 and below the 146,000 recorded early 1992 when Britain was in recession.

Nationwide is also offering reduced prices to those remortgaging and who wish to take out additional borrowing.

Under the new reduced rates, Nationwide borrowers who are changing mortgage will be offered an exclusive 5-year fixed rate with no fee at 5.95% compared to the previous figure of 6.15%.

The company says that home buyers will get a better deal with the new range of reduced fixed rates for house purchase.

Despite the move taken by Nationwide to cut down its fixed rates, CML figures however, show that in March, new home loans for first time buyers and new home owners plunged by 48% compared to the same month last year.