Gross lending by mutuals up 20% year-on-year in May

Gross mortgage lending by mutuals totalled £1.8bn in May, up 20% compared to the £1.5bn lent in May 2010, data from the Building Societies Association shows.

Mortgage approvals by mutuals, also £1.8bn, were up by 16% in May compared to last year.

Net lending by mutuals in May 2011 was -£267m, compared -£658m in May 2010.

Adrian Coles, director-general of the BSA, says: “Although activity in the market is still considerably weaker than pre-crunch levels, mutuals have been increasing their mortgage lending and offering competitive products that continue to feature in the best-buy tables.”

The research also reveals that savings balances held with mutuals fell by £418m in May 2011, compared to a reduction of £373m in May 2010.

When the interest credited to accounts is excluded, mutuals had a net withdrawal of £613m, compared to a net withdrawal of £576m in May last year.

Coles says: “Following a strong April inflow, savings balances at mutuals fell in May, in common with other private sector deposit-takers.  

“It seems likely that NS&I’s index-linked products attracted much of the money deposited in this period.”