Opinion Former Article

BSA: Mortgage lending by mutuals still on the up in April

Gross mortgage lending by building societies and other mutual lenders was £3.2 billion in April, up by 55 per cent compared to £2.1 billion in the same month last year. Mutuals took a 26 per cent market share of gross lending in April, up from 21 per cent in April 2012. In the year to April, gross lending by mutuals was £11.0 billion, up 28 per cent on the same period in 2012.

Net new mortgage lending (gross lending minus repayments) by mutuals was £0.9 billion in April, up from £0.2 billion in the same month last year. In the first four months of the year mortgage balances at mutuals have increased by £2.8 billion while balances at other lenders have fallen by £3.1 billion.

Building societies and other mutual lenders approved a total of 30,651 mortgages in April, up 30 per cent compared to the 23,617 in the same month last year.

Retail savings balances at mutuals rose by £1.5 billion in April.  In the same month last year balances grew by just £0.1 billion. In the first four months of the year balances have increased by £2.6 billion (net) compared to a reduction of £1.4 billion in the same period last year.

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

“Gross lending by building societies and other mutuals was up markedly in April - by 55 per cent compared to the same month last year and by 28 per cent in the first four months of the year. One reason for the substantial rise this month particularly is that 31 March 2012 marked the end of the stamp duty holiday for first time buyers.  This generated a lull in activity in April 2012.  Following last year’s trend, mutual lenders are still delivering the majority of additional lending into the market as other providers have continued to de-leverage their balance sheets.

Despite the downward pressure on savings rates from the Funding for Lending scheme, building societies and other mutuals experienced strong inflows into savings accounts in April, building on a strong March performance.  This, coupled with some recent retail sales data seems to indicate that many consumers are currently choosing saving over spending. Given the mixed bag of factors affecting the savings market, including interest rates, consumer prices and wages it is unclear if the strong savings inflows will continue for the duration of the year.”

ENDS

Contact:

Hilary McVitty
Tel: 020 7520 5926
Email: hilary.mcvitty@bsa.org.uk

Victoria Bamber
Tel: 020 7520 5927
Email: victoria.bamber@bsa.org.uk

Notes for Editors:

Mutual statistics April 2013 - data is not seasonally adjusted.

Mutuals April 2013 April 2012
Gross Lending £3,177m £2,050m
Net Lending £892m £172m
Mortgage Approvals (£) £3,665m £2,595m
Mortgage Approvals (No) 30,651 23,617
Change in Savings Balances £1,474m £99m
Net Receipts - All Savings £972m -£463m
Net Receipts – ISAs £1,696m £316m


Please contact BSA for additional data tables.

1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 46 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% 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 31% 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 46 building societies and four other mutual deposit taking and lending institutions in the UK.

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

4. Follow the BSA on Twitter @BSABuildingSocs

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