Building society lending for February hits 4bn

Building society gross advances reach 4.2bn in February 2007, compared to 3.183bn in February 2006.

Net advances were 1.3bn in February 2007, versus 629m in February 2006.

Approvals were 4.9bn in February 2007 up from 3.6bn in February 2006.

Building societies had net receipts of 781m in February 2007 compared to net receipts of 868m in February 2006.

Building society net receipts to cash ISAs were 123m in February 2007, compared to 129m in February 2006.

Adrian Coles, director-general says: “Yet again building societies saw record lending in February, with gross lending the highest ever recorded for that month.

Approvals (loans agreed but not yet made) were also the highest February on record.

“These are strong figures, but we may be seeing the peak of the market. The recent rate rises are still to work through fully into the mortgage market.

Therefore, mortgage lending figures might become a little more subdued as the year progresses.

“However, a reasonably strong economic outlook, especially continuing robust employment, should ensure that there is still demand for mortgages, just not at record highs.”

Coles adds: “Savings into building societies started strongly in 2006. Although down year on year, the seasonally adjusted figure of 874m in February 2007 compares well to the monthly average over the previous three years of 755m.

So far, the rate rises appear to be having a limited effect in attracting extra saving. However, we may see people switching to the safety of cash accounts over the next few months after the falls in stock markets in March.”