Opinion Former Article

BSA: Mortgage lending by mutuals up 20% in October

Building societies and other mutuals continue to support homebuyers and savers in the face of the weak outlook for the economy

In October, gross lending by building societies and other mutuals reached £2.3 billion, its highest level for any month since the BSA started reporting on the current basis (in January 2010), and 20% higher than in the same month last year. Savings balances held with building societies and other mutuals grew by £0.4 billion in October, compared to an outflow of £1.1 billion in October last year.

Lending:

? 20% rise in gross mortgage lending in October, up to £2.3 billion from £2.0 billion in October 2010.
? 15% increase in gross lending for the first ten months of 2011 at £19.1 billion (£16.6 billion, January - October 2010).
? £2.0 billion of mortgages approved by mutual lenders in October, up 14% on October 2010 (£1.8 billion).
? 18% rise in mortgage approvals for the first ten months of 2011 at £19.1 billion (£16.2 billion, January - October 2010).

Savings:

? Savings balances were up £0.4 billion in October 2011, compared to a decrease of £1.1 billion in October 2010.
? Excluding interest credited to accounts, building societies and other mutual deposit takers had net receipts of £0.2 billion in October 2011, compared to a net withdrawal of £1.3 billion in October 2010.
? In the first nine months of 2011, savings balances held with mutuals have increased by £3.2 billion, compared to a decrease in balances of £2.0 billion in the same period in 2010.

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

“With the Government recently announcing policies that highlight the importance of the housing market to the UK economy, building societies and other mutual lenders continue to play their part supporting homebuyers. So far this year, mutual lenders have lent 15% more than in the same period in 2010, whereas other lenders have so far lent 1% less than last year.

 “Despite the ongoing squeeze on household finances, mutual deposit takers have seen steady savings inflows in recent months, in contrast to the outflows this time last year. This improvement is likely to be because of the cash savings accounts on offer at mutuals which provide security that equity investments cannot in these uncertain times.”

~ Ends ~

Contacts

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


Notes

1. Mutual statistics October 2011 - further detailed statistical tables accompany this press release.

Data is not seasonally adjusted.

? Mutuals’ gross lending amounted to £2,348 million in October 2011 compared to £1,964 million in October 2010.
? Net lending by mutuals in October 2011 was £182 million compared -£286 million in October 2010.
? Mortgage approvals by mutuals in October 2011 were £2,015 million compared to £1,760 million in October 2010.
? Savings balances at mutuals increased by £416 million in October 2011 compared to a reduction of £1,118 million in October 2010.
? There was a net receipt of £202 million to savings accounts held with mutuals in October 2011 compared to a net withdrawal of £1,310 million in October 2010.
? Mutuals had a net withdrawal of £90 million from cash ISAs in October 2011 compared to a net withdrawal of £94 million in October 2010.


2. 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.

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

4. 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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