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Mortgage lending on the up at mutuals

Mortgage lending on the up at mutuals

Category: Mortgages

Updated: 04/01/2012
First Published: 04/01/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Mortgage lending by building societies and other mutuals increased significantly during November.

Figures from the Building Societies Association (BSA) show that gross lending by mutuals totalled £2.5 billion in the month, up from £2.0 billion in November 2010.

Over the longer term, there was a 16% increase in gross mortgage lending for the first 11 months of 2011 at £21.5 billion (£18.6 billion, January - November 2010).

"Mutuals have shown their resilience in the face of tough market conditions over the past year and have continued to see their new mortgage lending increase," said Adrian Coles, director-general of the BSA.

"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."

Savings levels also increased during the month, although not at quite the rate seen in the same month in 2010.

Savings balances increased by £0.5 billion in November 2011, compared to an increase of £0.6 billion in November 2010.

But 2011 was a better year overall for saving than 2010; in the first 11 months of 2011, savings balances held with mutuals have increased by £3.7 billion, compared to a decrease in balances of £1.3 billion in the same period in 2010.

"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," added Mr Coles.

"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."

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