Mutuals’ gross mortgage lending up 8% year-on-year

Gross mortgage lending by mutuals totalled £2.1bn in August, an 8% increase on the £2.0bn advanced in August 2010, according to figures from the Building Societies Association.

Mutuals’ gross lending was £14.5bn for the first eight months of 2011, 16% higher than the same period in 2010.

The data also shows that mutuals approved £2.1bn worth of mortgages in August, up 10% compared to July and up 17% on August 2010.

Mutuals’ mortgage approvals for the first eight months of the year totalled £14.5bn, up 16% on the £12.5bn approved during the same period in 2010.

Savings balances at mutuals were up £0.4bn in August, compared to a reduction of £0.7bn in August 2010.

Adrian Coles, director-general of the BSA, says: “Lending by mutuals has held up well over the summer months, and in August gross lending reached an 11-month high.

“Approval figures continue to look promising as consumers take advantage of the competitive mortgage rates currently offered by mutuals. 

“However, the outlook for the economy has deteriorated over the past month as has consumer confidence, which could well spill into the housing market, causing further weakness.”

He says the amount deposited in savings accounts at mutuals in August roughly equalled the amount withdrawn, but says this is a big improvement on August 2010, when there was a net withdrawal of over £1bn.

Coles adds: “Labour market conditions continue to be difficult, and inflation relatively high, so the relatively strong levels of savings at mutuals may well reflect households pulling out of equity investments in the face of continuing volatility in the markets.”