Building society lending up

Mortgage lending by building societies and other mutuals has soared in 2012, according to the Building Societies Association (BSA).

According to statistics from the BSA, gross mortgage by the sector was £14.1 billion in the first half of 2012, up 38 per cent on the £10.2 billion lent in 2011.
Lending rose 28% year-on-year to £2.7 billion in June 2012, up from £2.1 billion and net lending by mutuals was £2.7 billion in the first six months of 2012 and £0.7 billion in June 2012. Mortgage approvals by mutuals were also up, 45% year-on-year, in the first six months of the year and 35 per cent year-on-year for the month of June.

Retail savings balances at mutuals increased by £639 million in June 2012, compared to a net withdrawal of £94 million in June 2011.
Head of mortgage policy at the BSA Paul Broadhead said: “Lending by mutuals has grown in each month of 2012 on a year on year basis, and the June figures for mortgage approvals are above the previous six months' average.

“This means that lending by mutuals looks likely to continue to be strong in coming months. Growth in lending by banks over the past six months has been relatively weak while the economy remains in recession. In contrast, mutuals have demonstrated their commitment to lend, and are currently offering some of the best rates available in the market.

“It is encouraging that savings balances at mutuals increased in June, and this was a significant improvement compared to the same month last year. However, the low interest rate environment continues to make it challenging for households to save, especially when wage growth has been subdued for quite some time.”