BSA: Building society lending steady in November

Monday, 4 January 2010 12:00 AM

Gross mortgage lending by building societies was £1.6 billion in November, compared to £1.7 billion in October. There is usually a reduction in lending from October to November, and when seasonal factors are adjusted for, building society lending was £1.5 billion in November, the same as October.

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

"Although the housing market has stabilised slightly in recent months following the drop in activity at the start of the year, lending is still at lower levels than a year ago. Funding conditions for all lenders are improving slowly, but these are still acting as a brake on lending, as is the relatively small number of properties coming to market. Lending activity is likely to remain relatively depressed in 2010 until funding and supply conditions improve."

In the savings market balances held in savings accounts at building societies reduced by £0.6 billion in November. After interest credited to accounts is excluded, building societies had a net withdrawal of £0.8 billion in November.

Commenting on the savings figures, Mr Coles said:

"There is little incentive for people to increase savings while the Bank Rate remains at its current low level, and many may prefer to use their money to pay down debts, finance spending or invest elsewhere.

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

"In particular, National Savings offered a product in November which is likely to have resulted in substantial withdrawals from private sector institutions, including building societies."

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 £1,568 million in November 2009 compared to £2,510 million in November 2008.
¿ Net lending by building societies was -£543 million in November
2009 compared to £412 million in November 2008.
¿ Mortgages approved by building societies in November 2009 amounted to £1,291 million compared to £2,171 million in November 2008.
¿ Savings balances held by building societies decreased by £597 million in November 2009 compared to an increase of £851 million in November 2008.
¿ Excluding any interest added to building society savings accounts in the period, £775 million was withdrawn from building society savings accounts in November 2009, compared to a net receipt of £636 million in November 2008.
¿ Building societies had a net receipt of £32 million into Cash ISAs in November 2009, compared to a net receipt of £83 million in November 2008.

~ Ends ~

Notes to editors

1. Detailed statistical tables accompany this press release.

2.The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK, including all 52 building societies.
Building societies have total assets of £370 billion and, together with their subsidiaries, hold residential mortgages of almost £240 billion, approximately 20% of the total outstanding in the UK.

3. Photographs of Adrian Coles are available from the BSA press office, from the Association's website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk

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