BSA: Mortgage lending by mutuals rises 32 per cent in August
Mortgage lending by mutuals rises 32 per cent in August
Building societies and other customer-owned lenders and deposit takers (mutuals) continue to play an active role in a mortgage market which is showing sustained signs of recovery as consumer confidence improves. The number of loans approved across the whole market is, however, still well below the historic average*.
August mortgage lending highlights
· Gross lending in August up 32% to £4.0 billion compared to £3.0 billion in August 2012.
· Gross lending in the first eight months of the year stands at £26.1 billion, 30% higher than same period in 2012.
· Market share of gross lending in the first eight months of 2013 is 24% up from 21% in the same period last year.
· One in three new loans from mutuals in August were made to first time buyers (9,000 loans) of which 29% were made to borrowers with a deposit of 10% or less.
· Net new mortgage lending (gross lending minus repayments and redemptions) was £1.2 billion in August, up 26% on the same month last year.
· For the first eight months net new lending was £8.2 billion an increase of 87% on the same period in 2012.
· The £8.2 billion of net lending by mutuals in the eight months to the end of August 2013 more than offsets the negative lending figures for other lenders, so that across the UK total net new lending into the UK housing market has been £5.6 billion.
Savings balances in August
· Retail savings balances at mutuals rose by £1.5 billion in August compared to a £1.2 billion increase in the same month last year.
· In the first eight months of this year retail savings balances have risen by £7.1 billion compared to £1.9 billion during the same period in 2012.
Commenting, Adrian Coles, Director-General of the Building Societies Association said:
“Mutual lenders have sustained their activity in, and support for, the UK housing market and home-buyers over the long-term. Consumer sentiment has now clearly turned the corner and is beginning to improve. However, sentiment can be fragile and it is vital that unexpected surprises and overheated rhetoric are avoided. Viewing today’s market in context, it is certainly getting better, however, the number of loans approved for house purchase in the past three months ran at around 60,000 a month, less than two thirds of the historic average* .
“To deliver solutions to the growing housing needs of the UK and to provide balance to the supply/demand equation that drives prices, there is no doubt that we need more homes to be built. We welcome the focus from all political parties on the imperative to address this and other housing issues. This attention has been evident both from the platform speeches and plethora of housing related fringe meetings at party conferences. This is a debate in which the BSA and its members will remain active as policies develop. Following David Cameron’s announcement over the weekend we may see some lenders start to take Help to Buy: mortgage guarantee applications.
“Savers are also clearly continuing to choose mutual providers in large numbers as a safe place for their savings. The mutual sector continues to be well represented in the best buy tables even as the low Bank Rate, coupled with other external factors, sets the scene for a low rate environment which is likely to go on for some time yet.”
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Notes for editors
1. * 60,500 loans a month approved for house purchase in the last three months, compared to 96,300 per month between April 1993 and December 2005. Bank of England data code: LPMVTVX
2. Mutual statistics July 2013 – data is not seasonally adjusted.
Additional data tables here.
3. 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.
4. Data in this release relates to 45 building societies and four other mutual deposit taking and lending institutions in the UK.
Photographs of Adrian Coles are available from the BSA press office, or from the BSA website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
5. Follow the BSA on Twitter @BSABuildingSocs