Opinion Former Article

BSA: Mortgage lending by mutuals grows by almost a quarter in November

Gross lending by building societies and other mutuals was £2.5 billion in November, up 24% compared to November 2010 (£2.0 billion), and a new high since the BSA started reporting on the current basis in January 2010. Savings balances held by mutuals increased by £0.5 billion in November, compared to an increase of £0.6 billion in November 2010.

Lending:

 ? 24% rise in gross mortgage lending in November, up to £2.5 billion from £2.0 billion in November 2010.
 ? 16% increase in gross mortgage lending for the first 11 months of 2011 at £21.5 billion (£18.6 billion, January - November 2010).
 ? £2.1 billion of mortgages were approved in November, up 13% on November 2010 (£1.9 billion).
 ? 17% rise in mortgage approvals for the first 11 months of 2011 at £21.3 billion (£18.1 billion, January - November 2010).

Savings:

 ? Savings balances increased by £0.5 billion in November 2011, compared to an increase of £0.6 billion in November 2010.
 ? Excluding interest credited to accounts, mutual deposit takers had net receipts of £0.3 billion in November 2011, compared to a net receipt of £0.4 billion in November 2010.
 ? In the first 11 months of 2011, savings balances held with mutuals have increased by £3.7 billion, compared to a decrease in balances of £1.3 billion in the same period in 2010.

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

“Mutuals have shown their resilience in the face of tough market conditions over the past year and have continued to see their new mortgage lending increase. Mutuals lent 16% more from January to November 2011 compared to the same period in 2010, whilst lending across the mortgage market as a whole has remained broadly flat. The New Year has seen some excellent mortgage products go on sale from mutuals with a return to some offering higher loan to value mortgages. These are encouraging trends against rather discouraging developments in the wider economy.

“2011 has been a difficult year for savers who have faced a substantial squeeze on their incomes from rising living costs, relatively low wage growth and very low interest rates. Yet in recent months mutuals have seen a net inflow into savings accounts as savers look for the security and certainty which equity markets lack. Households may also be delaying big ticket purchases to put money aside for a rainy day.”


~ 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 November 2011 - further detailed statistical tables accompany this press release. Data is not seasonally adjusted.

? Mutuals’ gross lending amounted to £2,468 million in November 2011 compared to £1,998 million in November 2010.
? Net lending by mutuals in November 2011 was £256 million compared -£384 million in November 2010.
? Mortgage approvals by mutuals in November 2011 were £2,147 million compared to £1,900 million in November 2010.
? Savings balances at mutuals increased by £507 million in November 2011 compared to an increase of £625 million in November 2010.
? There was a net receipt of £289 million to savings accounts held with mutuals in November 2011 compared to a net receipt of £432 million in November 2010.
? Mutuals had a net withdrawal of £170 million from cash ISAs in November 2011 compared to a net withdrawal of £475 million in November 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

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