Building society net lending plummets by over 60%

Gross lending by building societies fell £1.808bn to £3.631bn in March 2008 compared with £5.439bn in March 2007, according to new figures from the building societies association

But the true state of the market is better revealed in the drop in the number of approvals and the net new lending figure which has plummeted by 67.6%.

Approvals – that’s mortgage offers in the pipeline, fell from 5,243 in March 2007 to 3,018 in March this year while net lending – that’s gross lending less repayments of principal, fell by more from £1,791m to £580m over the same period.

However, the BSA maintains that with building societies receiving some 70% of funding from the retail market, their continuing strength in attracting savings has meant that problems in the wholesale markets have exerted less of an impact than on competitors.