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BSA: Mutuals continue to grow lending to homebuyers

BSA: Mutuals continue to grow lending to homebuyers

Gross mortgage lending by building societies and other mutual lenders was £3.0 billion in October, up by 29% compared to the same month last year. Mutuals took a 24% market share of gross lending in October, up from 19% in October 2011. Gross lending in the first ten months of the year was £25.6 billion, up from £19.1 billion in the same period last year.

Net mortgage lending (gross lending minus repayments) by mutuals was £0.7 billion in October and £5.6 billion in the first ten months of the year which accounts for 86% of total net lending in the UK over this period.

Mutuals approved 25,000 loans in October, which is up 24% compared to the 20,100 in October last year.

Retail savings balances at mutuals fell by £0.1 billion in October 2012, compared to an increase of £0.4 billion in the same month last year. After interest credited is removed, mutuals had a net withdrawal of £0.4 billion from savings account in October compared to an increase of £0.2 billion in the same month last year.

Commenting, Adrian Coles, Director-General of the Building Societies Association, said:

"The lending figures seen today are further evidence that building societies and other mutuals are lending more to those looking to buy a home. Mutuals have accounted for 86% of all net lending in the UK in the year to October, which significantly outperforms other financial institutions. Around one in three loans made by mutuals are to first-time buyers.

"Mutuals are also offering more competitively priced products. The average mortgage rate offered by mutuals in October was 4.18% compared to 4.39% across the market[5]. Rates have also come down a little further in November which is potentially early evidence of the impact of the Bank of England's Funding for Lending Scheme.

"Savings balances at mutuals fell marginally in October. Households are still facing headwinds such as above-target consumer price inflation which increased unexpectedly to 2.7% in October. According to the Bank of England inflation is now unlikely to fall back towards its 2.0% target until the end of 2013. Conditions in the labour market are however improving, which should help alleviate some pressure on household budgets."

~ Ends ~

Contact:
Hilary McVitty
Tel: 020 7520 5926
Email: hilary.mcvitty@bsa.org.uk

Notes for Editors:

Additional data tables are attached.

1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 31% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

2. Data in this release relates to 47 building societies and four other mutual deposit taking and lending institutions in the UK.

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

4. Follow the BSA on Twitter @BSABuildingSocs

5. Source: Moneyfacts

Katie Wise
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway
London
WC2B 6UJ

Tel: 020 7520 5904
Email: katie.wise@bsa.org.uk
Web: www.bsa.org.uk
Twitter: @BSABuildingSocs