Opinion Former Article

BSA: Lending and savings up at mutuals in 2011

Gross lending by building societies and other mutuals in 2011 was £23.6 billion which is up 16% compared to 2010 (£20.4 billion), bucking the trend across much of the rest of the market. Gross lending by mutuals in December was £2.1 billion, up 15% compared to December 2010 (£1.8 billion).

Savings balances at mutuals increased by £4.0 billion in 2011 compared to an increase of £0.2 billion in 2010. Balances held with mutuals increased by £0.3 billion in December, compared to an increase of £1.5 billion in December 2010.

Lending:

. 16% increase in gross mortgage lending in 2011 at £23.6 billion (£20.4 billion in 2010).
. 15% rise in gross mortgage lending in December, up to £2.1 billion from £1.8 billion in December 2010.
. 19% rise in mortgage approvals in 2011 at £23.1 billion (£19.4 billion, 2010).
. £1.8 billion of mortgages were approved in December, up 49% on December 2010 (£1.2 billion).

Savings:

. In 2011, savings balances held with mutuals have increased by £4.0 billion, compared to an increase in balances of £0.2 billion in 2010.
. Savings balances increased by £0.3 billion in December 2011, compared to an increase of £1.5 billion in December 2010.
. Excluding interest credited to accounts, mutual deposit takers had a net withdrawal of £0.1 billion in 2011, compared to a net withdrawal of £3.7 billion in 2010.
. In December 2011, mutual deposit takers had a net withdrawal of £0.1 billion, compared to a net receipt of £1.1 billion in December 2010.

Commenting, Adrian Coles, Director-General of the Building Societies Association, said:

"Activity in the housing market has been weak throughout 2011 with the number of transactions close to an all time low. New lending by mutuals, however, rose 16% in 2011 compared to 2010, whilst the UK's major banks recorded a small reduction in lending over the same period. The housing market faces significant headwinds over the coming 12 months but mutuals are poised to take on these challenges and continue to offer market leading rates and innovative products to home movers and first-time buyers alike."

"Growth in savings balances at mutuals increased significantly in 2011 compared to previous years although it is clear that savers are still struggling to save as much as they would like, or are choosing to use spare cash to pay down debt instead. The fall in the rate of inflation may offer some breathing space to households but if conditions in the labour market continue to deteriorate and wage growth remains low, household finances are likely to remain squeezed for some time to come."

~ Ends ~

Contacts
Hilary McVitty and Rachel Wylie
Tel: 020 7520 5926 / 5905
Email: hilary.mcvitty@bsa.org.uk / rachel.wylie@bsa.org.uk

Notes for Editors:

Mutual statistics December 2011 - further detailed statistical tables accompany this press release. Data is not seasonally adjusted.

. Mutuals' gross lending amounted to £2,086 million in December 2011 compared to £1,811 million in December 2010.
. Net lending by mutuals in December 2011 was £32 million compared -£375 million in December 2010.
. Mortgage approvals by mutuals in December 2011 were £1,840 million compared to £1,233 million in December 2010.
. Savings balances at mutuals increased by £327 million in December 2011 compared to an increase of £1,503 million in December 2010.
. There was a net withdrawal of £129 million from savings accounts held with mutuals in December 2011 compared to a net receipt of £1,090 million in December 2010.
. Mutuals had a net withdrawal of £393 million from cash ISAs in December 2011 compared to a net withdrawal of £201 million in December 2010.

1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of over £235 billion, 19% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 34% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

2. Data in this release relates to 47 building societies and five other mutual deposit taking and lending institutions.

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



Katie Wise
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway
London
WC2B 6UJ

Tel: 020 7520 5904
Email: katie.wise@bsa.org.uk
Web: www.bsa.org.uk
Twitter: @BSABuildingSocs
 

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