Building society lending strong but slowing: BSA

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The rate of lending growth by building societies slowed in the third quarter, according to figures from the Building Societies Association.

The BSA says its members approved 110,129 new mortgage loans between July and September, up 6 per cent on the 103,758 mortgage loans approved in Q3 2015.

BSA members approved 118,600 mortgages in the second quarter of 2015, up from 98,300 in the same period of 2015.

There were 366,125 new mortgages approvals across the whole mortgage market in Q3 2016, meaning building societies took a market share of 30 per cent.

The BSA says the dip in its members’ lending growth reflects a wider market trend.

Gross lending by building societies in Q3 was £16.4bn, 9 per cent higher than the £15bn lent in the same period in 2015.

The gross lending figure for the second quarter of 2016 was £15.9bn, 16 per cent higher than the £13.7bn lent for the same period in 2015.

Building societies were responsible for 45 per cent of mortgage market growth in Q3, contributing £4.9bn of the total £10.9bn net lending across all mortgage lenders.

BSA chief economist Andrew Gall says: “The mortgage market has slowed after the rise in Stamp Duty on second homes in April, and the uncertainty following the EU referendum in June.

“However, the number of mortgages approved by building societies in the third quarter was up 6 per cent on the same period last year, whereas across the market as a whole the number of mortgages approved was down by 5 per cent.

“The sector’s continued significant share of mortgage lending demonstrates the competitive rates on offer and societies’ ongoing commitment to help consumers realise their aspirations to buy a home.”