Growth in mutual mortgage lending

Building Societies Association

Gross mortgage lending by building societies and other mutual lenders was £2.5 billion in September.

This was a rise of 10% compared to the same month last year.

Mutuals took a 22% market share of gross lending in September, up from 17% in September 2011, and took a 21% share of lending in the first nine months of the year.

Net mortgage lending (gross lending minus repayments) by mutuals was £0.5 billion in September, and £4.9 billion in the first nine months of the year.

Retail savings balances at mutuals fell by £0.2 billion in September 2012, compared to an increase of £0.6 billion in the same month last year. In the third quarter savings balances held with mutuals increased by £2.2 billion, compared to a £1.6 billion increase in the third quarter of 2011.

“These lending figures show that building societies and other mutuals are continuing to increase their lending to help people buy their homes,” said Adrian Coles, director-general of the Building Societies Association (BSA).

“Net mortgage lending by mutuals was £4.9 billion in the last nine months, out of £6.0 billion across the market as a whole.

“The funds from the Bank of England’s Funding for Lending Scheme will take some time to be drawn and flow through into the mortgage market. As the scheme is favourable to institutions which are looking to increase their lending, it will clearly appeal to many mutual lenders.

“Savings balances at mutuals fell slightly in September, which follows two consecutive months of particularly strong inflows into deposit accounts. Conditions in the labour market appear to be improving and consumer price inflation has reduced over recent months. Both these factors should reduce the pressure on household finances and help households to save more in coming months.”

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