Societies’ lending slump laid bare

Net lending by mutuals totalled just £324m in December 2008 - a huge drop from the £1.01bn recorded in December 2007.

Data from the Building Societies Association also reveals that gross mortgage lending fell to £2.4bn from £3.67bn in December 2007. Also, approvals fell to £836m in December 2008 compared with £2.98bn in the same month in 2007.

Net receipts grew to £897m in December – up from £636m in Nov-ember but down on the £1.89bn seen in December 2007.

Adrian Coles, director-general of the BSA, says: “The housing market is depressed so mortgage lending in December was low. House prices are expected to fall further and unemployment is rising, so buyers are waiting for the market to stabilise.”