BSA: Over a million new building society savings accounts opened in 2008

BSA: Over a million new building society savings accounts opened in 2008

BSA: Over a million new building society savings accounts opened in 2008

Over a million new building society accounts (net of closures) were opened in 2008, building societies reported today.

Adrian Coles, Director-General of the BSA, said:-

“The low interest rates that we currently have reduce the incentive to save, but the popularity of building society savings accounts is such that an additional 1.2 million accounts were opened over the last twelve months.”

Building societies suffered a small net outflow of funds in January 2009 of £390 million, although once normal seasonal factors are taken into account there was a healthy inflow.

“The withdrawal represents less than 4% of the total net receipts received by building societies in 2008. It is not unusual for building societies to have a net withdrawal in January, as savers take money out of their accounts to pay for Christmas expenditure. Outflows have occurred in six Januaries out of the last ten. Adjusting for this normal seasonal factor there was a healthy net inflow of £722 million, once again illustrating the popularity of building society savings accounts.”

Gross mortgage lending by building societies was £1,570 million in January, down on the £2,395 million seen in December.

Commenting on the figure, Mr. Coles said:-

“With the depressed state of the housing market, it is no surprise that mortgage lending was so low in January. Indeed, repayments of existing loans exceeded new lending. Potential buyers may not enter the market while it appears that house prices are likely to continue to fall. Lenders may also be wary about granting loans in a declining market and in the current unsettled market conditions will have concerns about the long term availability of funding.”

Building society statistics January 2009

· Building society gross lending amounted to £1,570 million in January 2009 compared to £4,088 million in January 2008.
· Net lending by building societies in January 2009 was -£491 million compared to £1,418 million in January 2008.
· Approvals in January 2009 were £347 million compared to £3,216 million in January 2008.
· Building societies had a net withdrawal of £390 million in January 2009 compared to net receipts of £594 million in January 2008.
· Building societies had a net withdrawal of £127 million from Cash ISAs in January 2009, compared to net receipts of £65 million in January 2008.

~ Ends ~

Notes to Editors

The Building Societies Association (BSA) represents all 55 building societies in the United Kingdom. Building societies have total assets of £395 billion and, together with their subsidiaries, hold residential mortgages of £250 billion, more than 20% of the total outstanding in the UK. Societies hold over £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.

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

In the previous ten years, building societies had net withdrawals in January in 2007, 2005, 2003, 2002, 2000 and 1999.

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