BSA: October gross lending by mutuals at similar level to recent months
Gross mortgage lending by mutuals was £2.0 billion in October, a 10% reduction on the £2.2 billion lent in September, but broadly similar to the average of £2.0 billion over the preceding three months. Mortgage approvals fell by 8% in October to £1.8 billion from £1.9 billion in September.
Commenting on the figures, Adrian Coles, Director-General of the BSA, said:
“Lending activity across the market has shown signs of weakening in recent months. Although lending by mutuals fell in October, gross lending remains similar to the average over the preceding three months. Reports of falling house prices and government spending cuts have lowered consumer confidence which has put further downward pressure on demand for mortgages.
“An encouraging trend in recent quarters, however, has been the growth in mortgage approvals at mutuals and this may lead to some recovery in mutuals’ market share over the next few months.”
Savings balances held at mutuals decreased by £1.1 billion in October, following a decrease of £0.6 billion in September. Excluding interest credited to accounts £1.3 billion was withdrawn in October, compared to £0.8 billion in September.
Commenting on the savings data Coles said:
“The current economic climate is proving challenging for households. Consumer price inflation remains above average earnings growth and the labour market remains fragile. This is squeezing household finances and many are using their savings to supplement their incomes or to pay off debt. The low interest rate environment is also proving a continued challenge to attract savings.”
Mutual statistics October 2010
Data below are not seasonally adjusted.
. Mutuals’ gross lending amounted to £1,964 million in October 2010 compared to £2,176 million in September.
. Net lending by mutuals in October 2010 was -£290 million compared to -£11 million in September.
. Mortgages approvals by mutuals in October 2010 were £1,760 million compared to £1,912 million in September.
. Savings balances at mutuals decreased by £1,118 million in October 2010, compared to a decrease of £568 million in September.
. Mutuals had a net withdrawal from savings accounts of £1,310 million in October 2010 compared to a net withdrawal of £819 million in September.
. Mutuals had a net withdrawal of £94 million from Cash ISAs in October 2010 compared to a net receipt of £194 million in September.
Important media note: For data relating to January 2010 onwards, the Bank of England has combined figures for building societies and mutually owned banks. This new data is reported as the ‘mutual sector’. Previous data will not be restated and therefore it is not possible to make comparisons with previous years. For more information about this change please see www.bsa.org.uk
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Notes to Editors
1. Detailed statistical tables accompany this press release.
2. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 49 UK building societies. Mutual lenders and deposit takers have total assets of over £365 billion and, together with their subsidiaries, hold residential mortgages of almost £235 billion, 19% of the total outstanding in the UK. They hold more than £245 billion of retail deposits, accounting for 21% of all such deposits in the UK. Mutual deposit takers account for about 36% of cash ISA balances. They 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
Rachel Wylie (née Le Brocq)
Press and Public Affairs Manager
The Building Societies Association
6th Floor, York House
23 Kingsway, London
WC2B 6UJ
Tel: 020 7520 5905
Mobile: 07773489644
Fax: 020 7240 5290
www.bsa.org.uk
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