Increase in mortgage lending

Monday 2nd April 2012

Gross mortgage lending by building societies and other mutual lenders rose 28% in February 2012, compared to the same month last year, according to the latest data from the Building Societies Association.

New mortgage approvals - the future pipeline of completions, were also up 31% on February 2011 and 29% on January 2012, indicating an increased level of consumer activity with mutuals.

On the other side of the balance sheet mutuals experienced a retail savings outflow of £87million in the month compared to an inflow of £359million in February 2011. This is an improvement on January where the outflow was £1.1billion.

Adrian Coles, BSA Director-General, said: "Gross lending and new mortgage approvals by mutuals continued to rise year-on-year in February, despite growth across the market as a whole remaining relatively flat.

"The strong financial results released by a number of mutual lenders in recent months show that the sector is well positioned to offer market leading products to its customers and are open for business.

"Household finances remain under pressure. Rising unemployment, declining real incomes and a lower-for-longer base rate environment combine to make it difficult and less attractive for savers to increase their deposits in savings accounts. It is therefore unsurprising that savings balances fell slightly in February."

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Mike Jones