Media Centre
Press release
BUILDING SOCIETIES’ NET LENDING PICKS UP IN SEPTEMBER
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Contact: Neil Johnson Date: 29 Oct 2008 |
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Net mortgage lending by building societies increased to £314 million in September, from -£37 million in August, but was still 47% lower than the figure for September last year. Gross mortgage lending by building societies was £3.1 billion, a decline of 22% on September 2007, as buyers continue to stay away from the market.
Commenting on the figures, Adrian Coles, Director General of the BSA, said:-
“With the housing market depressed as house prices continue falling and with confidence amongst potential homebuyers low, it is no surprise that mortgage lending is down on last year, and the mortgage market is unlikely to recover for some time. Nevertheless, the increase in net lending in September is to be welcomed.”
Turning to the savings figure, Mr. Coles said:-
“Although there were net withdrawals of £170 million in September, this represents just 0.9% of the net receipts received by the sector over the last year. It is the first outflow since January 2007, when £196 million was withdrawn from building societies.
“This outflow can be partly attributed to the extreme turbulence in the financial markets in September. This generated uncertainty amongst savers, who clearly valued the safety offered by publicly owned deposit takers.
“It is also notable that, unusually, there was also a substantial withdrawal by individuals from bank accounts. It seems likely that the whole of the private financial services sector was affected by competition from the public sector.
Furthermore, a significant number of fixed rate bonds matured over September. This further contributed to the outflow.”
Building society statistics September 2008
- Building society gross lending amounted to £3,105 million in September 2008 compared to £3,991 million in September 2007.
- Net lending by buildingsocieties in September 2008 was £314 million compared to £592 million in September 2007.
- Approvals in September 2008 were £2,510 million compared to £3,668 million in September 2007.
- Building societies had a net withdrawal of £170 million in September 2008 compared to net receipts of £2,821 million in September 2007.
- Building societies had net withdrawals of £367 million from Cash ISAs in September 2008, compared to net receipts of £68 million in September 2007.
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Link to funding table
Link to lending table
CONTACT: Neil Johnson
Direct Line: 020 7520 5903
Night / Weekend: 07908764549
Email: neil.johnson@bsa.org.uk
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The Building Societies Association (BSA) represents all 59 building societies in the United Kingdom. Building societies have total assets of over £360 billion and, together with their subsidiaries, hold residential mortgages of £250 billion, more than 20% of the total outstanding in the UK. Societies hold about £235 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 37% of all cash ISA balances. Building societies employ over 51,500 full and part-time staff and operate through more than 2,000 branches.
Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk ( http://www.bsa.org.uk/ ) or Headlinemoney www.headlinemoney.co.uk ( http://www.headlinemoney.co.uk/ ).
Detailed statistical information can be found on the accompanying spreadsheets.
A list of all building societies can be found on the BSA website at http://www.bsa.org.uk/aboutus/buildsocmember.htmand demutualised institutions at http://www.bsa.org.uk/consumer/factsheets/100010.htm
The net wholesale funding figure in September 2008 is larger than usual because of securitisation related activity.
