20% Increase in year-on-year lending puts societies streets ahead of banks
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Building societies’ gross mortgage lending grew by 20% year-on-year in October, compared with an increase of just 4% from high street banks.
Latest figures from the Building Societies Association show gross mortgage lending by mutuals totalled £2.3bn in October, a 20% increase on the £2bn advanced in October 2010.
This compares to gross lending of £8bn among high street banks in October, only 4% higher than in October 2010.
The mutual figure is the highest level for any month since the trade body started reporting on its current basis in January 2010.
Since the start of the year, mutuals have lent £19.1bn in mortgages, up 15% on the £16.6bn lent in the corresponding period in 2010.
Approvals by mutuals totalled £2bn in October, up 14% on October 2010’s figure of £1.8bn.
Adrian Coles, director-general of the BSA, says: “With the government recently announcing policies that highlight the importance of the housing market to the economy, building societies and other mutual lenders continue to play their part supporting buyers.
“This year mutuals have lent 15% more than in the same period in 2010, whereas other lenders have so far lent 1% less than last year.” He adds that mutual deposit takers have seen steady savings inflows in recent months despite the ongoing squeeze on house hold finances.
Dale Jannels, managing director of All Types of Mortgages, says he expects the growth in societies’ gross lending to continue in 2012.
He says: “Societies are the ones that have had the appetite to lend this year and are more active than high street banks. They are always phoning us and wanting to lend more. Societies will often think outside the box when it comes to products and that is what the market needs.”
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