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Mortgage lending increases by 33% at mutuals

Mortgage lending increases by 33% at mutuals

Category: Mortgages

Updated: 31/10/2011
First Published: 31/10/2011

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 It is now over 6 months old so the content may be out of date.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 increased significantly at building societies and other mutuals in September, figures from the Building Societies Association (BSA) show.

Lending by mutuals totalled £2.5 billion last month, up 22% on August (£2.1 billion), and up 33% on September 2010 (£1.9 billion).

Mortgage lending has increased by almost a fifth in the first nine months of the year, rising by 18% from £14.5 billion during the same period last year to £17.1 billion.

The BSA said that the current value of mortgage approvals and gross lending in September 2011 are at their highest level for any month since the body started reporting the figures in January 2010.

"Although the UK economic outlook remains challenging, mutual lenders continue to support homebuyers by providing attractive mortgage products," said Adrian Coles, director-general of the BSA.

"This has led to a 33% increase in mortgage approvals in September, compared to the same time last year.

"Mortgage approvals indicate how gross lending will change in coming months. Over the first three quarters of the year gross lending by mutuals was up 14% on the previous year, and the growth in approvals suggests that this trend will continue into the final quarter of 2011."

In addition, the level of savings held by building societies and mutuals increased by £0.6 billion in September, compared to an outflow of the same amount in September last year.

It continues a trend of rising savings balances in 2011, according to Mr Coles.

'Savings balances held with mutual deposit takers have risen by £1.6 billion over the third quarter of 2011, in stark contrast to the decrease of £2.3 billion for the same period in 2010," he said.

"Part of the reason for this improvement is likely to be the recent stock market volatility causing investors to seek a more stable home for their money."

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