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Mortgage lending and savings up at mutuals

Mortgage lending and savings up at mutuals

Category: Mortgages

Updated: 29/11/2011
First Published: 29/11/2011

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Both mortgage lending and savings balances increased at building societies in October, new figures have revealed.

The headline statistic shows that there was a 20% increase in mortgage lending by mutuals, up to £2.3 billion from £2.0 billion in October 2010, according to the Building Societies Association (BSA).

Adrian Coles, director general of the BSA, said that with the Government recently announcing policies that highlight the importance of the housing market to the wider economy, building societies and other mutuals are continuing to help support homebuyers.

"So far this year, mutual lenders have lent 15% more than in the same period in 2010, whereas other lenders have so far lent 1% less than last year," he added.

In 2011 so far, BSA members have given the OK to some £19.1 billion of mortgage lending, well in excess of the £16.2 billion that was lent in the same period last year.

The savings picture is also much improved in 2011.

Savings balances increased by £0.4 billion last month, compared with a fall of £1.1 billion in October 2010.

It continues a trend of increases in 2011 compared with falls in 2010, a feature that Mr Coles says has been caused, at least in part, by a desire from savers to err on the side of caution.

"Despite the ongoing squeeze on household finances, mutual deposit takers have seen steady savings inflows in recent months, in contrast to the outflows this time last year," he commented.

"This improvement is likely to be because of the cash savings accounts on offer at mutuals which provide security that equity investments cannot in these uncertain times."

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