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Building societies increase mortgage lending

Building societies increase mortgage lending

Category: Mortgages

Updated: 03/04/2013
First Published: 03/04/2013

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 It is now over 6 months old so the content may be out of date.

Gross mortgage lending from building societies continued to grow during February, reaching £2,465 million and reflecting an annual rise of 29%, according to latest figures issued by the Building Societies Association (BSA).

The number of mortgages successfully approved by mutuals grew from 21,020 to 24,295 during February 2013.

Mutuals took a 23% share of the mortgage market, up from 18% last year.

Increased levels in mortgage activity is believed to be a result of the £80 billion Funding for Lending Scheme, launched last August by the Government to kick-start the ailing housing and mortgage market.

Paul Broadhead, head of mortgage policy at the BSA, said: "Both gross and net mortgage lending rose in a market where lending by other institutions remained weak.

"We welcome the Government's renewed focus on the challenges faced by people looking to buy for the first time or move home, but it is a shame that the Help to Buy guarantee is needed.

"If all lenders acted to help first-time buyers and other creditworthy borrowers with smaller deposits, as mutuals have done consistently over the last year and more, this intervention would not be needed," he concluded.

Help to Buy, unveiled in the Chancellor's Budget last month, is available to borrowers with deposits of 5% and comprises of two schemes: the "equity loan" whereby the Government will lend up to 20% of the value of a new build home, and a "mortgage guarantee", intended to incentivise lenders to broaden the availability of mortgages to people with small deposits.

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