BSA: September mortgage lending by mutual sector shows 50% rise

September mortgage lending by mutual sector shows 50% increase on 2012

Lending by building societies and other mutual lenders was 50% higher in September 2013 than the same month last year, demonstrating a continued improvement in consumer confidence about home purchase.  The mutual sector is the only part of the mortgage market that has grown, with net lending for the whole mortgage market in September (£1.1 billion) below total net lending by mutual lenders (£1.4 billion).

September mortgage lending highlights:

Gross lending up 50% to £3.7 billion compared to £2.5 billion in September 2012.
Total gross lending for the first nine months is £29.9 billion, 32% higher than same period in 2012.
Gross lending market share for the first nine months of 2013 is 24%, up from 21% January-September 2012.
Around one in three new loans from mutuals in the nine months to September were made to first time buyers (61,000 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 £1.4 billion in September, almost three times the amount in the same month last year.
Total net new lending by mutual lenders January – September 2013 was £9.7 billion, double the amount in the same period last year.
Total net new lending for the mortgage market as a whole January – September was £6.8 billion

Savings balances in September:      

Retail savings balances at mutuals rose by £67 million in September compared to an outflow of £242 million in the same month last year.
In the first nine months of this year retail savings balances have risen by a total of £7.2 billion compared to a £1.7 billion increase January – September 2012.

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

“Building societies and other mutual lenders have been consistently open for business for the past year plus.  What has changed and is the main factor driving this year-on-year lending increase, is a palpable improvement in consumer confidence.  Currently, the primary success criterion that we are using to judge schemes such as Help to Buy is the positive effect that they have had on the behaviour of existing and aspiring homeowners.      

“Despite the increase in the cost of living, the UK public is still saving.  With energy costs in particular now rising quite dramatically, household budgets will come under increasing pressure this winter.  It is inevitable that this will eventually be reflected in the amount that individuals are able to save whether for specific purchases or simply to put by for a rainy day.  We may well see this change reflected both in the retail sales figures for Christmas and savings numbers into the New Year.”