Mortgage lending by building societies up by 55%

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.

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.”