BSA: Mortgage lending remains low

BSA: Mortgage lending remains low

BSA: Mortgage lending remains low

Gross mortgage lending by building societies was £2,395 million in December, down on the £2,595 million seen in November while net receipts into building societies were £897 million in December, up from £636 million in November.

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

“Activity in the housing market remains very depressed, and as a result the amount of mortgage lending in December was low. House prices are widely expected to fall further and unemployment is rising, so potential buyers remain cautious and are staying out of the market as they wait for it to stabilise.

“Despite the Bank of England’s official interest rate reducing to 2% in December, building societies were able to attract funds by providing competitive interest rates on savings accounts, and being trusted as a safe place for deposits. December’s figure could also have been boosted by deposits made from compensation paid to customers of the failed Icelandic bank Icesave.”

Building society statistics December 2008

· Building society gross lending amounted to £2,395 million in December 2008 compared to £3,669 million in December 2007.
· Net lending by building societies in December 2008 was £324 million compared to £1,055 million in December 2007.
· Approvals in December 2008 were £836 million compared to £2,980 million in December 2007.
· Building societies had net receipts of £897 million in December 2008 compared to net receipts of £1,888 million in December 2007.
· Building societies had a net withdrawal of £212 million from Cash ISAs in December 2008, compared to net receipts of £46 million in December 2007.

~ Ends ~

1. The Building Societies Association (BSA) represents all 55 building societies in the United Kingdom. Building societies have total assets of £380 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

Neil Johnson
Mortgage Policy Advisor
Building Societies Association
Tel : 020-7520 5903
E-Mail : neil.johnson@bsa.org.uk

The Building Societies Yearbook 2008-09 is now available – http://www.bsa.org.uk/publications/industrypublications/yearbook0809.htm