BSA: 2007 - Buliding societies smash savings record

BSA: 2007 – Buliding societies smash savings record

BSA: 2007 – Buliding societies smash savings record

Building societies attracted a record £16.1 billion of savings inflows in 2007. This is almost double the £8.3 billion inflow in 2006. The previous record was in 1988, when £13.6 billion was deposited as savers sought the safety of building society saving accounts following the stock market crash of October 1987.

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

“2007 was a bumper year for building society savings. The majority of the deposits came in the latter months of 2007, so a significant proportion is almost certainly funds withdrawn from Northern Rock bank. However, a substantial amount is also likely to be from households increasing the amount they save in preparation for a more uncertain year ahead. With competitive interest rates on offer and uncertain times in the equity markets, building societies continue to be an attractive home for people’s savings.

“In addition, societies raised net funding of £19.1 billion in the wholesale markets in 2007, compared to £13.5 billion in the previous year. In December alone over 40 building societies were active in the wholesale markets raising a net £6.4 billion.”

Turning to the mortgage figures, Mr. Coles said:

“Gross lending by building societies was almost flat year on year, at £52.1 billion in 2007, compared to £52.8 billion in 2006. However, net lending by building societies was down by 20.7% to £12.6 billion in 2007, largely because of higher interest rates in the mortgage market as a whole.”

Building Society Statistics December 2007

* Building societies had net receipts of £1,888m in December 2007 compared to net receipts of £1,070m in December 2006.

* Building society net receipts to cash ISAs were £46m in December 2007, roughly half the £90m deposited in December 2006.

* Building society gross advances amounted to £3,728m in December 2007, compared to £3,970m in December 2006.

* Net advances were £977m in December 2007, versus £560m in December 2006.

* Approvals were £3,144m in December 2007 down from £3,962m in December 2006.

~ Ends ~

1. FUTURE RELEASE DATES – please note that the release date for future figures will change next month, to coincide with data released by the Bank of England. The next release will be on the 29 February, with subsequent dates listed in column 5 of this table: http://www.bankofengland.co.uk/statistics/2008.pdf

2. The Building Societies Association (BSA) represents all 59 building societies in the United Kingdom. Building societies have total assets of just under £325 billion and, with their subsidiaries, hold residential mortgages of around £250 billion, approximately 20% of the total outstanding in the UK. Societies hold just under £210 billion of retail deposits, accounting for about 20% of all such deposits in the UK. Building societies also account for over 37% of all cash ISA balances. Building societies employ over 50,000 full and part-time staff and operate through more than 2,100 branches.

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

4. A list of all building societies can be found on the BSA website at http://www.bsa.org.uk/aboutus/buildsocmember.htm and demutualised institutions at http://www.bsa.org.uk/consumer/factsheets/100010.htm