Building Societies

Building Societies’ lending remains low as housing market remains depressed

Building Societies’ lending remains low as housing market remains depressed

Net mortgage lending by building societies was £413 million in October, an improvement compared to £314 million in September, but still 45% lower than the figure for October last year. Gross mortgage lending by building societies was £3.2 billion, a decline of 30% on October 2007.

Commenting on the figures, Adrian Coles, Director General of the BSA, said:-

“With the depressed state of the housing market, it is no surprise that mortgage lending by societies remains low, albeit slightly improved in September. With confidence in the market so restrained, homeowners are choosing to stay put rather than move, while first time buyers continue to wait for further falls in prices.”

Turning to the savings figure, Mr. Coles said:-

“Net receipts into building society savings accounts were £115 million in October. With the continuing squeeze on household incomes, people have less to save and are possibly choosing to repay existing debt rather than save.”

Building society statistics October 2008

  • Building society gross lending amounted to £3,214 million in October 2008 compared to £4,582 million in October 2007.
  • Net lending by building societies in October 2008 was £413 million compared to £747 million in October 2007.
  • Approvals in October 2008 were £2,777 million compared to £3,838 million in October 2007.
  • Building societies had net receipts of £115 million in October 2008 compared to net receipts of £3,024 million in October 2007. The October 2007 figure was the record month for net receipts to building societies as a consequence of the massive withdrawals from Northern Rock bank at that time.
  • Building societies had net receipts of £1,168 million from Cash ISAs in October 2008, compared to net receipts of £91 million in October 2007.

~ Ends ~

Notes to Editor:

1. The Building Societies Association (BSA) represents all 58 building societies in the United Kingdom. Building societies have total assets of over £360 billion and, together with their subsidiaries, hold residential mortgages of £250 billion, more than 20% of the total outstanding in the UK. Societies hold about £235 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 37% of all cash ISA balances. Building societies employ over 51,500 full and part-time staff and operate through more than 2,000 branches.

2. 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

3. Detailed statistical information can be found on the accompanying spreadsheets

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