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Building society net lending falls to -£491m

Net lending by building societies in January this year was in negative territory at -£491m, compared to £1.4bn in January 2008.

The latest figures from the Building Societies Association show that gross mortgage lending by building societies fell dramatically from £2.4bn in December to £1.57bn in January.

Building society gross mortgage lending is also significantly down from last year’s levels, at £4.1bn at the same time last year.

Approvals in January were £347m compared to £3.2bn the previous year.

Net withdrawals for the month hit £390m, whereas in 2008 it was receipts that were dominant with building societies receiving £594m in net receipts.

Adrian Coles, director-general of the BSA, says: “With the depressed state of the housing market, it is no surprise that mortgage lending was so low in January.

“Indeed, repayments of existing loans exceeded new lending.”

Coles adds: “Potential buyers may not enter the market while it appears that house prices are likely to continue to fall.

“Lenders may also be wary about granting loans in a declining market and in the current unsettled market conditions lenders will have concerns about the long-term availability of funding.”


AFB calls for FSA regulation of second charge lending

The Association of Finance Brokers has called on the Treasury and the Department for Business, Enterprise and Regulatory Reform to pass responsibility for regulation of second and subsequent charge residential lending to the Financial Services Authority.


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