Opinion Former Article

BSA: Increase in mortgage lending by mutuals sustained in November

Building societies and other mutual lenders made £2.7 billion of mortgage loans in November 2012, up 9% compared to November 2011. This means that mutual lenders accounted for 21% of gross mortgage lending in the UK in November 2012.

In the first eleven months of 2012, mutuals lent £28.3 billion of mortgages (gross), accounting for 22% of the whole market. In this period, mutual lenders made over 61,000 loans to first-time buyers, up from 36,000 loans in the same period in 2011.

Net mortgage lending (gross lending minus repayments) by mutuals was £0.6 billion in November 2012. In the first eleven months of 2012 net lending by mutuals amounted to £6.2 billion, out of £7.2 billion across the market as a whole over this period.

Looking ahead to future completions, mutuals approved 24,800 new mortgage loans in November 2012, 19% higher than the 20,800 loans approved in November 2011.

Retail savings balances held with mutuals increased by £0.7 billion in November 2012, compared to an increase of £0.5 billion in November 2011. If interest credited to accounts in the period is removed, mutuals saw a net inflow into savings accounts of £0.4 billion in November compared to an increase of £0.3 billion in the same month a year earlier.

Commenting, Paul Broadhead, Head of Mortgage Policy at the Building Societies Association, said:

"Mortgage lending by building societies and other mutuals increased substantially in 2012 based on the data we have published today for the first 11 months of the year. Mutual lenders accounted for a greater share of total gross lending in this period than over the equivalent period in 2011, showing that the sector has stepped up to the plate and supported many of those looking to purchase a home.

"Importantly, this new lending has been broadly spread, including many first-time buyers and borrowers with lower levels of deposit. In the first eleven months of 2012, over 61,000 loans were made by mutuals to help people buy their first home, compared to 36,000 in the same period a year earlier.

"Mutual lenders continue to offer some of the most competitive mortgages available on the market. The average mortgage rate available on new loans from the sector was 4.09% in November, well under the 4.32% average on offer across the market as a whole[5].

"Savings balances held with mutuals also increased in November. We will see in coming months whether this is the start of a trend. Historically we often see withdrawals from savings accounts following the festive period as consumers pay off Christmas debts."

~ Ends ~
Hilary McVitty
Tel: 020 7520 5926
Email: hilary.mcvitty@bsa.org.uk

Notes for Editors:

Mutual statistics November 2012 - data is not seasonally adjusted.

Additional data tables are available on request.

1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 47 UK building societies. Mutual lenders and deposit takers have total assets of over £375 billion and, together with their subsidiaries, hold residential mortgages of £245 billion, 20% of the total outstanding in the UK. They hold more than £250 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for 31% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.

2. Data in this release relates to 47 building societies and four other mutual deposit taking and lending institutions in the UK.

3. Photographs of Paul Broadhead are available from the BSA press office, or from the Association's website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk

4. Follow the BSA on Twitter @BSABuildingSocs

5. Source: Drawn from Moneyfacts data
Katie Wise
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House
23 Kingsway

Tel: 020 7520 5904
Email: katie.wise@bsa.org.uk
Web: www.bsa.org.uk
Twitter: @BSABuildingSocs

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