BSA: Mortgage lending remains subdued
Media note on the August data – It is difficult to make comparisons with previous data as Britannia merged with The Co-operative Financial Services at the start of the month. Britannia is no longer classified as a building society.
Gross lending by the 52 UK building societies in August 2009 was £1.5 billion, and building societies’ approvals totalled £1.3 billion in August 2009.
Commenting on the figures, Adrian Coles, BSA Director-General, said:
“Gross lending was subdued in August, but appears to be at broadly similar levels to recent months after seasonal factors are adjusted for.
However, the market remains very depressed compared to previous years.
“Despite signs of a modest improvement in market conditions in recent months, activity will not return to normal levels until funds for mortgage lending are more widely available to building societies and other lenders.”
In the savings market, balances held in savings accounts at building societies fell £202 million in August 2009. Excluding any interest credited to accounts, building societies experienced a net withdrawal of £473 million.
Commenting on the figures Mr Coles said:
“Balances held at building societies fell in August, which signals that savers are continuing to withdraw more money than they save. This is not surprising given the very low Bank Rate, and the difficulties faced by many households, with job losses rising and income growth remaining subdued. These factors are affecting all deposit-takers in the UK.”
Note: Figures for August 2009 exclude Britannia, but August 2008 data includes Britannia.
¿ Building society gross lending was £1,494 million in August 2009 compared to £2,660 million in August 2008.
¿ Net lending by building societies in August 2009 was -£655 million compared to -£14 million in August 2008.
¿ Mortgage approvals in August 2009 were £1,264 million compared to £2,880 million in August 2008.
¿ Savings balances held by building societies decreased by £202 million in August 2009, compared to an increase of £995 million in August 2008.
¿ Excluding any interest added to building society savings accounts,
£473 million was withdrawn in August 2009, compared to a net receipt of £708 million in August 2008.
¿ Building societies had a net receipt of £737 million into Cash ISAs in August 2009, compared to net withdrawal of £292 million in August 2008.
The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 52 UK building societies.
Building societies have total assets of over £370 billion and, together with their subsidiaries, hold residential mortgages of over £245 billion, more than 20% of the total outstanding in the UK. Societies hold nearly £240 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 36% of all cash ISA balances. Building societies employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
3. 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
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