BSA: Strong mortgage lending by mutuals in first half of year
Strong mortgage lending by mutuals in first half of year
Gross mortgage lending by building societies and other mutual lenders was £3.5 billion in June and £18.0 billion in the first half of the year, up by 28 per cent compared to £14.0 billion in the first half of 2012. This gives mutuals a 24 per cent market share of gross lending in the first half of 2013, up from 21 per cent in the first half of 2012.
Net new mortgage lending (gross lending minus repayments) by mutuals was £1.4 billion in June and £5.5 billion in the first half of the year, up from £2.6 billion in the first half of 2012.
Building societies and other mutual lenders approved a total of 165,800 mortgages in the first half of the year, up 17 per cent compared to the 141,200 in the same period last year.
Retail savings balances at mutuals rose by £1.2 billion in June, and by £4.9 billion in the first half of the year. In the first half of last year balances at mutuals fell by £0.5 billion.
Commenting, Brian Morris, Head of Savings Policy at the BSA said,
“Building societies and other mutual lenders have performed strongly in the mortgage market during the first half of the year, with net lending of £5.5 billion more than double the amount they lent in the same period last year. In contrast lending by other institutions, such as banks, was negative in the first half of 2013 at minus £3.0 billion as mortgage repayments outstripped new lending by those institutions.
Mutuals have increased their lending across the spectrum to all types of borrowers including first time buyers and those with small deposits. In fact lending to first time buyers accounted for almost a third of all lending by the sector in the year to June, helping 38,000 people take the first step on to the property ladder. This has been achieved ahead of the launch of the Government’s Help to Buy: Mortgage Guarantee Scheme, demonstrating that mortgage finance for those with lower deposits is already available at a building society.
“In the continuing low interest rate environment, building societies and other mutuals endeavour to continue to offer value to their customers. This has been reflected in strong inflows into savings accounts in the year to June, which contrasts with the outflow seen in the same period last year. Nonetheless, economic conditions remain challenging for savers, with average wage growth running well behind increases in consumer prices which rose 2.9 per cent in the year to June. It is therefore not clear how long this savings trend can be sustained.”
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Notes for Editors:
1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 45 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 45 building societies and four other mutual deposit taking and lending institutions in the UK.
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