Building societies recorded a whopping £1.35bn in savings business in February – the largest inflow the sector has seen for 11 years.
Figures published by the Building Societies Association last week show that the February figure compares with £728m in the same month last year.
Societies’ net receipts to cash ISAs increased by £7m in February while their year-on-year gross lending fell to £3.8bn from £4.2bn.
Brian Morris, head of savings policy at the BSA, says: “Societies enjoyed an-other strong month in February as high interest rates and attractive products encouraged individuals to save with them.”
Research from consumer finance website Mform.co.uk supports this claim, highlighting the fact that societies offered the most competitive mortgage deals in Q1 2008.
Francis Ghiloni, marketing and business development director at Mform.co.uk, says: “The mortgage market has been in turmoil for the past few months, with deals being pulled and tougher conditions being imposed on borrowers.
“Borrowers have to understand that just because a lender was good when they last took out a mortgage, it doesn’t follow that it will still be able to offer the same quality of deals.”
He adds: “The market is changing all the time which is why consumers must research it as widely as possible when sourcing mortgage deals.”
The BSA statistics also reveal that net lending and approvals fell in February, declining by £486m and £1.23bn respectively.
Morris says: “This suggests the lower level of activity in the housing market reported by the Land Registry in December is continuing into 2008.”