Building Society Mortgage Lending Increased Sharply in November 2011

 The Building Societies Association (BSA) revealed this week that mortgage lending by mutuals increased by nearly a quarter in November last year, giving more people the opportunity to become householders. The amount of gross lending by building societies and other mutuals came to £2.5 billion in total during that month a 24 per cent increase compared to the £2 billion lent in November 2010, the BSA said. This represents a new high water mark since January 2010, when the association began reporting lending under current arrangements. From January to November last year, the BSA reported a 16 per cent increase in gross mortgage lending, with a total sum of £21.5 billion lent. This compares to just £18.6 billion being lent in the first 11 months of 2010. Last November also saw a 13 per cent increase in mortgage approvals, compared to the same period the previous year. During that month the total amount of mortgage approvals were valued at £1.9 billion. Over the first 11 months of 2011, some £12.3 billion worth of mortgages were approved by mutuals, a 17 per cent increase compared to the £18.1 billion approved in January-November 2010. BSA director-general Adrian Coles commented: The New Year has seen some excellent mortgage products go on sale from mutuals with a return to some offering higher loan to value mortgages. These are encouraging trends against rather discouraging developments in the wider economy.” “2011 has been a difficult year for savers who have faced a substantial squeeze on their incomes from rising living costs, relatively low wage growth and very low interest rates. Yet in recent months mutuals have seen a net inflow into savings accounts as savers look for the security and certainty which equity markets lack. Households may also be delaying big ticket purchases to put money aside for a rainy day.”

Published on 3 January 2012

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