Building societies see 23% increase in mortgage lending

Gross mortgage lending by building societies and other mutual lenders rose 23% in April 2012 compared to the same month last year, the latest figures from the Building Societies Association reveal.

In the first four months of 2012 lending rose 36% compared to the same period in 2011.

While mortgage approvals by mutuals were up 50% in April compared to the same month last year, and were 20% higher than the average over the previous six months.

Showing a very healthy pipeline, approvals were up 43% in the first four months of the year compared to the same period in 2011.

Retail savings balances at mutuals increased by £99m in April, compared to an increase of £1,468m in the same month last year. After interest credited is removed there was a net withdrawal of £463m in April.

Adrian Coles, director-general of the BSA, says: “Gross lending by mutuals increased again in April year on year, whilst lending by banks fell slightly. As expected gross lending was down on the March figure as mortgage lending in that month was boosted by first-time buyer activity to beat the Stamp Duty holiday.

“Approvals were strong in April running well above the previous six month average. This clearly indicates that mutuals will continue to be active lenders to homebuyers in coming months.”

Michael Coogan, strategic adviser at Deloitte’s financial services practice, says: “The figures show that the early gain of market share in the first few months of 2012 has continued, albeit in a smaller market which is feeling the effects of the Stamp Duty exemption removal in March. 

“With several banks deleveraging, there is an opportunity for mutuals to continue to enhance their competitive position over the rest of the year and grow their businesses despite the uncertain operating environment.”