BSA: Building society approvals and gross lending hold steady

Monday, 30 November 2009 12:00 AM

The value of building society mortgage approvals in October was £1,511 million - broadly in line with the £1,565 million of approvals in September. Gross lending also remained steady with £1,666 million being lent in October compared to £1,605 million in September.

Commenting on the lending figures, Adrian Coles, BSA Director-General,
said:

"Modest improvements in the housing market have occurred in recent months, especially when compared to the start of the year, however lending still remains subdued compared to previous years. Funding conditions remain difficult and the supply of properties to the market is low, frustrating any increase in demand for house purchase. Lending activity is likely to remain depressed until funding and supply conditions improve."

In the savings market balances held in savings accounts at building societies reduced by £929 million in October. After interest credited to accounts is excluded, building societies had a net withdrawal of £1,240 million.

Commenting on the savings figures, Mr Coles said:

"There is little incentive for people to increase savings whilst the Bank Rate remains at its current low level, and many may opt to repay debt instead. This is reflected in a reduction in savings balances at building societies this month.

Building societies and other deposit takers are also facing heightened competition from institutions with a Government guarantee, which is creating further distortions in the savings market."

Media note: It is difficult to make direct comparisons with previous years' data as Britannia merged with Co-operative Financial Services in August 2009, after which Britannia is no longer classified as a building society.

Data below are not seasonally adjusted.

¿ Building society gross lending was £1,666 million in October 2009
compared to £3,105 million in October 2008.

¿ Net lending by building societies was -£521 million in October
2009 compared to £394 million in October 2008.

¿ Mortgages approved by building societies in October 2009 amounted
to £1,511 million compared to £2,902 million in October 2008.

¿ Savings balances held by building societies decreased by £-929
million in October 2009 compared to an increase of £545 million in October 2008.

¿ Excluding any interest added to building society savings accounts
in the period, £1,240 million was withdrawn from building society savings accounts in October 2009, compared to a net receipt of £115 million in October 2008.

¿ Building societies had a net receipt of £233 million from Cash
ISAs in October 2009, compared to a net receipt of £1,168 million in October 2008.

Notes:

1. Detailed statistical tables are available (lending) here
and (funding) here

2. The Building Societies Association (BSA) represents mutual
lenders and deposit takers in the UK including all 52 UK building societies. Building societies have total assets of over £370 billion and, together with their subsidiaries, hold residential mortgages of over £245 billion, more than 20 per cent of the total outstanding in the UK.
Societies hold nearly £240 billion of retail deposits, accounting for more than 20 per cent of all such deposits in the UK. Building societies also account for about 36 per cent of all cash ISA balances. Building societies employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

Rachel Le Brocq
Press and Public Affairs Manager
The Building Societies Association
6th Floor, York House
23 Kingsway, London
WC2B 6UJ

Tel: 020 7520 5905
Mobile: 07773489644
Fax: 020 7240 5290
www.bsa.org.uk

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