BSA: Gross lending up 15% at building societies

Monday, 1 February 2010 12:00 AM

Gross mortgage lending by building societies was £1.8 billion in December, compared to £1.6 billion in November, an increase of 15%.
Gross lending for 2009 totaled £18.6 billion compared to £37.5 billion in 2008.

Commenting on the lending figures, Paul Broadhead, BSA Head of Mortgage Policy, said:

"Whilst it is encouraging to see an increase in gross lending at the end of the year when activity would typically decline, we believe it is likely that this rise can be attributed to a rush from buyers keen to complete transactions before the year end in order to beat the removal of the stamp duty holiday. Despite this rise, total gross lending in
2009 was only half of that in 2008 and it is likely to remain at low levels until funding conditions improve."

In the savings market balances held in savings accounts at building societies increased by £15 million in December. Excluding interest credited to accounts, building societies had a net withdrawal of £0.4 billion in December. Total balances at building societies reduced by £1 billion in 2009 compared to an increase of £19 billion in 2008.

Commenting on the savings figures, Brian Morris, BSA Head of Savings Policy, said:

"Savers continue to face difficult conditions while the Bank Rate remains at such a very low level, especially with inflation returning in the near term. December is traditionally a slow month for savings as consumers make additional purchases for the Christmas period, and the return of VAT to 17.5% at the end of the year provided a further incentive to spend."

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.

Building society statistics December 2009

Data below are not seasonally adjusted.

¿ Building society gross lending amounted to £1,815 million in December 2009 compared to £2,312 million in December 2008.
¿ Net lending by building societies in December 2009 was -£283 million compared to £273 million in December 2008.
¿ Approvals in December 2009 were £1,038 million compared to £901 million in December 2008.
¿ Building societies had net withdrawals of £354 million in December
2009 compared to net receipts of £897 million in December 2008.
¿ Building societies had a net withdrawal of £10 million from Cash ISAs in December 2009, compared to net withdrawal of £212 million in
December 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 UK building societies.
Building societies have total assets of almost £335 billion and, together with their subsidiaries, hold residential mortgages of almost
£235 billion, 18% of the total outstanding in the UK. They hold just under £220 billion of retail deposits, accounting for nearly 20% of all such deposits in the UK. Building societies account for about 32% of all cash ISA balances. They employ approximately 43,000 full and part-time staff and operate through approximately 1,700 branches.

3. Photographs of Paul Broadhead and Brian Morris are available from the BSA press office, or from the Association's website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk

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